Hutchins Roundup: Emergency room wait times, family leave, and more

Studies in this week’s Hutchins Roundup find reducing wait times in the emergency room lowered mortality, higher family leave payments don’t harm women’s job prospects, and more.

Want to receive the Hutchins Roundup as an email? Sign up here to get it in your inbox every Thursday.

Reducing wait times in the emergency room lowered mortality in UK hospitals

In 2004, the U.K. mandated that emergency departments should treat 98 percent of patients within four hours of arrival, or face large fines. Jonathan Gruber of the Massachusetts Institute of Technology and Thomas P. Hoe and George Stoye of the Institute for Fiscal Studies examine the impact of the “four-hour wait” policy on wait times and patient mortality. They find that introducing a threshold reduced wait times by 7 minutes on average, and by 19 minutes for patients who waited for close to four hours. In addition, 30-day mortality declined by 14 percent, one-year mortality declined by 3.1 percent, and hospitals admitted more patients to inpatient care, leading to slightly higher costs. The authors use differences in effects across types of patients to show that reduced wait times, and not increased admissions lowered patient mortality. They conclude that using policy to influence doctor’s decisions can have a beneficial effect on healthcare outcomes.

Higher family leave payments don’t harm women’s job prospects in California

Women in California can get 16 weeks of state-paid maternity leave, which replaces up to 55 percent of prior income. There is some concern that, by increasing the amount of leave women take, paid maternity leave could make women less attractive to employers. Comparing the leave taken by women receiving just above and just below the maximum benefit, Sarah Bana and Kelly Bedard of the University of California, Santa Barbara and Maya Rossin-Slater of Stanford University find that higher benefit payments don’t increase the amount of leave women take. However, women with higher maternity benefits are more likely to file a second claim for family leave within the next three years, they find. Nevertheless, raising the benefit amount does not harm women’s job prospects, as women with higher benefits actually worked more over the next one to two years. The authors note that these results are particular to women near the top of California’s income distribution and may not extend to those in lower income brackets.

Evidence at county-level suggests that the 2009 fiscal stimulus increased household consumption

The American Recovery and Reinvestment Act (ARRA) of 2009 awarded roughly $228 billion in contracts, grants, and loans between 2009 and 2012. Using ARRA allocations by county, Bill Dupor of the Federal Reserve Bank of St. Louis, Marios Karabarbounis of the Federal Reserve Bank of Richmond and coauthors find that a $1 increase in county-level government spending increases local retail spending by 11 cents and local auto spending by 7 cents.  They estimate that a $1 increase in government spending increases household spending by 40 cents nationally, as the effect on local household spending is amplified by trade across county borders. This suggest that a $1 dollar increase in local government spending increases total output by $1.40.

Chart of the week: Growth in earnings has been uneven across states

Quote of the week:

“[I]t’s difficult to say with any precision how tight labor markets are. Usually we associate tight labor markets with rising wages. The official statistics indicate that compensation growth has moved up, from under 2 percent earlier in the expansion to over 2.5 percent more recently. And increasingly, firms are telling us that they are responding to labor shortages by offering higher wages and benefits to attract and retain workers. But so far wage growth hasn’t been as strong as one might normally expect from tight labor markets …,” says Loretta J. Mester, president of the Federal Reserve Bank of Cleveland.

“The movements in labor force participation, combined with the fact that wage and price inflation have remained moderate even as labor markets continue to strengthen, suggest that labor market conditions may not be as tight as I had been assuming.”