Publications:
"Does Non-Employment Based Health Insurance Alleviate Job Lock? Evidence from a Policy Experiment in Urban China"
with Yuting Zhang. Journal of Comparative Economics. 2017
Previous researchers have shown that employment-based health insurance lowers job mobility and deters entrepreneurship. The Urban Resident Basic Medical Insurance (URBMI) program, piloted in 2007 in China and fully established in 2009, offers health insurance to about 271 million urban residents without formal employment. Before the implementation of URBMI, most urban residents obtained health insurance through their employers, and therefore a large number of unemployed and self-employed individuals were uninsured. Thus, URBMI creates a new insurance option that does not depend on formal employment and may promote entrepreneurship. We take advantage of this policy change to evaluate the effect of URBMI on self-employment. Using 2000-2011 data from the China Health and Nutrition Survey and a difference-in-differences approach with propensity score weighting, we found that URBMI increased self-employment rate by at least 8.73% for the overall population. The result was mainly driven by the URBMI's impact on unhealthy workers, individuals with 12 years of schooling or less, and workers above 30 years old.
"Effects of Integrated Chronic Care Models on Health Outcomes and Spending: A Multi-Town Clustered Randomized Trial in China"
with Yuting Zhang, Wenxi Tang, Liang Zhang, and Yan Zhang. BMC Public Health. 2017
Hypertension affects one billion people globally and is one of the leading risk factors for cardiovascular and renal diseases. In order to improve hypertension management and to evaluate an innovative integrated chronic care models, a clustered randomized controlled trial was conducted in rural China. Six towns were randomly assigned to three groups: Group 1 with integrated care including a multidisciplinary team and continuous care coordination, Group 2 with both integrated care and provider-level financial incentives, and the control group with the usual care. Using difference-in-differences models, we found that the integrated care model significantly lowered systolic blood pressure by 1.93 mmHg, improved self-assessed health-related quality of life, and reduced the hypertension-related hospitalization rate by 0.17 percentage points. We also found that the provider-level financial contract further lowered blood pressure by 1.76 mmHg, reduced hospitalization rate and inpatient spending, but also reduced patients' self-assessed health-related quality of life. In sum, integrated care and financial incentives are effective in lowering blood pressure and reducing hospitalization rate, but financial contracts may hurt patients' quality of life.
"Using a Modified Next Generation ACO Benchmark Can Improve MSSP"
with Richard Svoboda and Yuting Zhang. The American Journal of Accountable Care. 2016
The current benchmark method used by Medicare Shared Saving Program (MSSP) Accountable Care Organizations (ACO) favors historically high-cost ACOs. Using 2012-2014 Medicare spending data and MSSP ACO performance data, we analyze the effect of benchmarks on ACO savings under the original benchmark method and two adjusted benchmark methods by incorporating regional and national efficiency discounts as implemented in the Next Generation ACO model. The adjustments can reduce the correlation between ACO earned savings and historical spending, but proposed adjustment levels are not large enough to remove the correlation. By simulating different adjustment levels, we conclude that a combined national and regional discount cap of 3.5 percent best removes the correlation between benchmark and MSSP ACO performance. While the Next Generation ACO benchmark adjustment is effective at reducing the correlation between prior poor performance and ACO's savings, the adjustment should be larger to completely remove this positive relationship.
Working Papers:
"The Effects of Lowering Blood Pressure on Income: Evidence from a Randomized Controlled Trial in Rural China"
with Yuting Zhang, Wenxi Tang, Liang Zhang, and Yan Zhang. (Submitted)
This paper explores the effects of lowering blood pressure on annual income. Health interventions can result in social welfare gains through improvements in both physical well-being and income. Previous literature has encountered difficulties in estimating the causal impact due to the endogeneity of health and the prevalence of employment contracts that limit income flexibility. Studying elderly farmers in rural China who need to perform un-mechanized farm work to make a living provides an opportunity for us to observe an unusually tight link between health, productivity, and income. Hypertension is one of the most prevalent chronic diseases in the world, but little is known about the impact of high blood pressure on labor market. The paper exploits data from a randomized controlled trial designed to improve hypertension management in a rural county in southwest China and utilizes the exposure to the interventions as an instrumental variable. We find that a one standard deviation decrease in systolic blood pressure can significantly increase annual income by 4.2%. The results of the cost-benefit analysis demonstrate that our interventions indeed resulted in large welfare gains.
"Entrepreneurship or Necessity? Credit Constraint and Self-Employment in China"
Credit constraint and the lack of access to formal sources of external finance are often considered as a major deterrent to business formations around the world. In this paper, I analyze a major policy change in China—the 2007 Property Rights Law that improved the access to credit—and examine its impact on the formation of different types of self-employment—opportunity entrepreneurship and necessity entrepreneurship. Opportunity entrepreneurs are owner-managers who exploit business opportunities, hire workers, and promote overall economic activity. Necessity entrepreneurs are individuals who turn to self-employment as a last resort. I construct a structural model that incorporates both liquidity constraint and employee hiring choices, and use it to make predictions on the corresponding self-employment rates after a relaxation of credit constraint. I test the predictions empirically, finding that the 2007 Property Rights Law promotes entrepreneurship represented by the amount of owner-mangers in the economy, but it has little impact on necessity entrepreneurs.
"Better Hukou, Better Spouse? Tradeoffs in Chinese Marriage Market"
Researchers found that marriage sorting can affect long run inequality of a society. This paper uses the Hukou system in China to demonstrate how institutions affect marriage sorting and inequality. Hukou is a household registration system in China that constrains the free mobility between rural and urban areas. I found that in the Chinese marriage market, urban Hukou can compensate for personal disadvantages such as income and education. This paper directly calculates the compensation effect an urban Hukou has using a marriage matching model and data from 2010 Chinese Family Panel Studies. From the female's perspective, the marginal rate of substitution between a male's Hukou and his log income is around 4, but it is inconclusive from the male's perspective. My result suggests that Hukou system not only creates inequality by giving urban Hukou residents more privileged status but also increases long term inequality of the society through the marriage sorting channel. My paper also contributes to the ongoing debates over Hukou system reform.