State-level Changes Research Articles

Founder Replacement and Startup Performance

We provide causal evidence that venture capitalists (VCs) improve the performance of their portfolio companies by replacing founders. Augmenting a database of U.S.-based, VC-backed startups from 1995-2008 with hand-collected information regarding turnover, we exploit shocks to the supply of outside executives via state-level changes in the enforceability of employee non-compete agreements. Although naive regressions of startup performance on founder replacement would suggest a negative correlation, this may be due to selection as founders are likely to leave or be pushed out of poorly-performing startups. Indeed, instrumented regressions reverse the sign of this effect, suggesting that replacing founders improves the performance of venture-backed entrepreneurial firms. Replacement helps more when founders hold CXO roles and when the incoming replacement has substantial work experience. The evidence points to the replacement of founders as a specific mechanism by which VCs add value.

Effects of state-level policy changes on homicide and nonfatal shootings of law enforcement officers

ObjectiveTo evaluate the impact of state-level policy changes on assaults on law enforcement officers (LEOs) in the USA.MethodsPooled time series and cross-sections with negative binomial regression were used to estimate...

Assessing Spatial and Temporal Differences in State-Level Child Well-Being Based on Tests of Statistical Significance.

The concept of child well-being is central to the study of children and are reflected in data books, statistical indices, and report cards. Statistical indicators of child well-being are increasingly used to examine the quality of life for children. Such reports are often used to examine differences across geographic areas (spatial differences) and changes over time (temporal differences). In this study, indicators from a widely used report on child well-being are used to compare spatial differences and temporal differences among states in the U.S. based on tests of statistical significance. Results show that currently available indicators are better at detecting differences in child well-being between states at one point in time rather than state-level changes over time. Additionally, a state index of child well-being is constructed using only indicators that are statistically significant different than the national rate; the results of the new index proved to be similar to the more traditional z-score method.

A Multi-State Analysis of Early-Term Delivery Trends and the Association With Term Stillbirth.

To investigate whether reduction in early-term deliveries was associated with increasing rates of term stillbirth. This is a retrospective descriptive analysis of variation in term delivery timing and stillbirth from 2005 to 2011 based on birth certificate and fetal death data. Early-term deliveries (37 0/7-38 6/7 weeks of gestation) as a percentage of total term delivery and term stillbirth rates were calculated for each state, both overall and for low- and high-risk women. We analyzed whether state-level changes in early-term deliveries and term stillbirth were correlated using Pearson correlation coefficients. States were also categorized as high or low reduction (above or below the national average) and changes in stillbirth rates for these groups were analyzed using a Cochrane-Armitage test for linear trend. There was a decline in early-term deliveries across the United States: 1,123,467 of 3,533,233 term, singleton births occurred in the early term in 2005 (31.8%) as compared with 978,294 of 3,429,172 (28.5%) in 2011. Reductions varied widely by state. There was no change in the term stillbirth rate (123/100,000 births in 2005 compared with 130/100,000 in 2011; P=.189) nor change in the high reduction states alone. There was no correlation between state-level changes in early-term deliveries and term stillbirth. There was an increase in term stillbirths among women with diabetes (from 238/100,000 to 300/100,000 births; P=.010), independent of changes in early-term delivery timing. The reduction in early-term deliveries across the United States between 2005 and 2011 was not associated with an increase in the rate of term stillbirth. II.

Adventures in Implementation: Mandating Open Space Preservation in a Weak Mandate State

ABSTRACT:This study uses a mix of qualitative, quantitative, and spatial statistical methods to investigate local government responses to a state level change in land use policy. The results suggest that local governments resisted state intervention, and were guided mainly by self-interest and peers’ actions when deciding whether or not to change their ordinances. The study examines the reasons for this principal–agent failure, and suggests an alternative approach for other weak-mandate states attempting to influence local land use policy.

Economic Freedom, Migration, and Income Change in the United States: 1995 to 2010

Migration is primarily motivated by economic reasons, but people also move for a variety of other purposes, including a desire for political and economic freedom. Although freedoms are often thought of as dominant reasons for international migration in political states with federal systems of governments, migration across internal political borders also takes place to take advantage of local differences in political and economic regulations, taxes, and public goods. Using the combined Internal Revenue Service/Census Bureau state-to-state migration data for 1995 to 2010, we examine the relationship between economic freedom and migration and its impact on state-level income change. We find that economic freedom is positively associated with income change due to net migration but not associated with gains or losses from income differences between in- and outmigrants. In general, states with higher or lower levels of economic freedom gained or lost income due to migration.

Determinants, Effects, and Funding of Arts Consumption

We conducted a three-phase study of arts participation using SPPA (Survey of Public Participation in the Arts) data going back to 1982. Using statistical methods to correct for possible survey sampling bias (including clustering, stratification, and weighting), in phase 1 we confirm previous findings that arts participation as traditionally measured is declining, almost universally. We examined both individual art forms as well as aggregate measures. In phase 2 of the paper, we exploit the unique situation of free art museums in Washington, D.C., to quasi-experimental tests and found only mixed evidence to support the expected result that higher income leads to more arts participation. The more surprising and interesting finding, with stronger evidence to support it, is that arts participation actually leads to higher levels of family income. In supplementary tests (phase 3), we found that treatment effects analysis using nearest-neighbor matching (on gender, natural log of income, education, ethnicity, urban location, and survey year) showed consistent and generally statistically significant evidence of an effect of the NEA budget cuts on arts education during the 1995/6 budget years. For every aggregated variable (combining 8, 7 or 6 of the individual categories) we saw findings consistent with the fact that students who were exposed to the reduction in arts funding (that is, survey respondents born after 1982, the “treated” group) had lower levels of arts involvement relative to their otherwise similar control matches. Finally, we examined whether arts participation is related in any way to state-level changes in opinions over time, as measured by presidential election results. We found that changes in arts participation over the 2002-2012 timeframe (the years for which SPPA data include survey respondents’ location) were robust to consideration of presidential election voting margins, although respondents from more Democratic-leaning states were more likely to attend art museums and live jazz, and to a lesser extent, plays and craft fairs.

Education Policies May Influence ADHD Diagnoses

Education Policies May Influence ADHD Diagnoses

The effect of early-life education on later-life mortality

Many studies link cross-state variation in compulsory schooling laws to early-life educational attainment, thereby providing a plausible way to investigate the causal impact of education on various lifetime outcomes. We use this strategy to estimate the effect of education on older-age mortality of individuals born in the early twentieth century U.S. Our key innovation is to combine U.S. Census data and the complete Vital Statistics records to form precise mortality estimates by sex, birth cohort, and birth state. In turn we find that virtually all of the variation in these mortality rates is captured by cohort effects and state effects alone, making it impossible to reliably tease out any additional impact due to changing educational attainment induced by state-level changes in compulsory schooling.

Approach bias and cue reactivity towards food in people with high versus low levels of food craving

ObjectiveEven though people suffering from high levels of food craving are aware of the negative consequences of binge eating, they cannot resist. Automatic action tendencies (i.e. approach bias) towards food cues that operate outside conscious control may contribute to this dysfunctional behavior. The present study aimed to examine whether people with high levels of food craving show a stronger approach bias for food than those with low levels of food craving and whether this bias is associated with cue-elicited food craving. MethodForty-one individuals reporting either extremely high or extremely low levels of trait food craving were recruited via an online screening and compared regarding approach bias towards visual food cues by means of an implicit stimulus-response paradigm (i.e. the Food Approach-Avoidance Task). State levels of food craving were assessed before and after cue exposure to indicate food cue reactivity. ResultsAs expected, high food cravers showed stronger automatic approach tendencies towards food than low food cravers. Also in line with the hypotheses, approach bias for food was positively correlated with the magnitude of change in state levels of food craving from pre-to post-cue exposure in the total sample. DiscussionThe findings suggest that an approach bias in early stages of information processing contributes to the inability to resist food intake and may be of relevance for understanding and treating dysfunctional eating behavior.

Labor unemployment insurance and earnings management

We provide new evidence that firms appear to manage long-run earnings upward in order to manage rank and file employees’ perceptions of employment security. In particular, we exploit exogenous state-level changes in unemployment insurance benefits and test for partial unwinding of prior upward earnings management when benefits increase. Consistent with the hypothesis, we find a significant reduction in abnormal accruals, increased recognition of special items and write downs, and greater likelihood of net income-reducing restatements, following an increase in state-level unemployment benefits. A number of cross-sectional results are also consistent with the hypothesis.

Labor Unemployment Insurance and Earnings Management

We provide new evidence that firms appear to manage long-run earnings upward in order to manage rank and file employees’ perceptions of employment security. In particular, we exploit exogenous state-level changes in unemployment insurance benefits and test for partial unwinding of prior upward earnings management when benefits increase. Consistent with the hypothesis, we find a significant reduction in abnormal accruals, increased recognition of special items and write downs, and greater likelihood of net income-reducing restatements, following an increase in state-level unemployment benefits. A number of cross-sectional results are also consistent with the hypothesis.

State Abortion Context and U.S. Women's Contraceptive Choices, 1995–2010

The number of women in the United States exposed to restrictive abortion policies has increased substantially over the past decade. It is not well understood whether and how women adjust their contraceptive behavior when faced with restrictive abortion contexts. Data from 14,523 women aged 15-44 were drawn from the 1995 and 2010 cycles of the National Survey of Family Growth. A difference-in-differences approach was employed to examine the relationship between state-level changes in women's access to abortion and their contraceptive choices. Multinomial logistic regression analysis was used to determine the relative risk of using highly effective or less effective methods rather than no method for women exposed to varying levels of restrictive abortion contexts. Women who lived in a state where abortion access was low were more likely than women living in a state with greater access to use highly effective contraceptives rather than no method (relative risk ratio, 1.4). Similarly, women in states characterized by high abortion hostility (i.e., states with four or more types of restrictive policies in place) were more likely to use highly effective methods than were women in states with less hostility (1.3). The transition to a more restrictive abortion context was not associated with women's contraceptive behavior, perhaps because states that introduced restrictive abortion legislation between 1995 and 2010 already had significant limitations in place. To prevent unwanted pregnancies, it is important to ensure access to highly effective contraceptive methods when access to abortions is limited.

The bumble bees (Hymenoptera: Apidae: <i>Bombus</i>) of Arkansas, fifty years later

Many species of bumble bees (Hymenoptera: Apidae: Bombus Latreille) are declining throughout their ranges in North America, yet detecting population trends can be difficult when historical survey data are lacking. In the present study, contemporary data is compared to a 1965 survey to detect changes in bumble bee distributions throughout Arkansas. Using county-level records as a point of comparison to look for changes in state-wide occurrence among species over time, we find that state-level changes reflect national trends. Contemporary records of Bombus bimaculatus Cresson and B. impatiens Cresson have more than tripled, while records for B. pensylvanicus (De Geer) show a decline to 61% of historical levels. Although B. fervidus (Fabricius) has been reported infrequently in the state, misidentifications may have led to an overestimation of the state’s species richness. In addition to an updated assessment of the bumble bees of Arkansas, we also provide new, localized information on the seasonal phenology and plant preferences of each species that can be used to guide conservation efforts.

Labor Unemployment Risk and CEO Incentive Compensation

In this paper, we investigate the impact of workers’ unemployment risk, a salient attribute of labor market frictions, on the design of CEO incentive compensation. Exploiting state-level changes in unemployment insurance benefits as a source of variation in the unemployment costs faced by workers, we find that, after unemployment insurance benefits increase, boards adjust the compensation structure and provide managers with more stock option grants that result in more convexity payoffs. Such a change is consistent with the view that CEO’s risk-taking incentives are amplified to take advantage of lower unemployment costs. The increase in convexity payoff structures is more pronounced in labor-intensive industries and industries that have higher layoff propensity, but is significantly attenuated when strong labor unions are present. The results are also stronger when CEO wealth is more closely tied to firm performance. Finally, we show that the increase in convexity payoff from option-based compensation induces firms to undertake more risky investments that deliver improved operating performance after the increase in unemployment insurance benefits. These results suggest that firms respond to unemployment risk by changing their risk taking behavior, and one channel through which they do so is executive compensation.

Appointment Availability after Increases in Medicaid Payments for Primary Care

BackgroundProviding increases in Medicaid reimbursements for primary care, a key provision of the Affordable Care Act (ACA), raised Medicaid payments to Medicare levels in 2013 and 2014 for selected services and providers. The federally funded increase in reimbursements was aimed at expanding access to primary care for the growing number of Medicaid enrollees. The reimbursement increase expired at the end of 2014 in most states before policymakers had much empirical evidence about its effects.MethodsWe measured the availability of and waiting times for appointments in 10 states during two periods: from November 2012 through March 2013 and from May 2014 through July 2014. Trained field staff posed as either Medicaid enrollees or privately insured enrollees seeking new-patient primary care appointments. We estimated state-level changes over time in a stable cohort of primary care practices that participated in Medicaid to assess whether willingness to provide appointments for new Medicaid enrollees was related to the size of increases in Medicaid reimbursements in each state.ResultsThe availability of primary care appointments in the Medicaid group increased by 7.7 percentage points, from 58.7% to 66.4%, between the two time periods. The states with the largest increases in availability tended to be those with the largest increases in reimbursements, with an estimated increase of 1.25 percentage points in availability per 10% increase in Medicaid reimbursements (P=0.03). No such association was observed in the private-insurance group. During the same periods, waiting times to a scheduled new-patient appointment remained stable over time in the two study groups.ConclusionsOur study provides early evidence that increased Medicaid reimbursement to primary care providers, as mandated in the ACA, was associated with improved appointment availability for Medicaid enrollees among participating providers without generating longer waiting times. (Funded by the Robert Wood Johnson Foundation.)

Temporal trends in stillbirth in the United States, 1992–2004: a population‐based cohort study

To examine temporal trends in stillbirth and its risk factors in the United States (US), and to assess the contribution of labour induction and caesarean delivery to the stillbirth rate. Population-based cohort study based on linked birth-infant death and fetal death data files from the US National Vital Statistics System. Complete data were available for 44 states and the District of Columbia. Singleton births from 1992 to 2004. We assessed changes in stillbirth rates from 1992-1994 to 2002-2004 before and after adjustment for changes in maternal characteristics including maternal age, education, smoking, and medical risk factors, using Cox regression models. We also carried out an ecological study, using states as the units of analysis, to assess the impact on the stillbirth rate of increasing induction and caesarean delivery. Race-specific subgroup analyses were performed and included non-Hispanic Whites and non-Hispanic Blacks. Stillbirth rate. The stillbirth rate among non-Hispanic White singleton births decreased 11.5% from 1992-1994 (5.2 per 1000) to 2002-2004 (4.6 per 1000). After adjustment for maternal risk factors, the hazard ratio (HR) for 2002-2004 was 1.01 (0.99, 1.03) for gestational age (GA) ≤39 weeks, but 0.92 (0.86, 0.99) at 40 or more weeks. The ecologic analysis revealed a nonsignificant negative correlation of -0.17 (-0.44, 0.13) between state-level changes in stillbirth at GA ≥40 weeks and labour induction. A nonsignificant positive correlation of 0.23 (-0.07, 0.49) was observed between changes in stillbirth at all GAs and caesarean delivery and did not differ at GA ≤39 versus ≥40 weeks. Results were similar among non-Hispanic Blacks. Changes in maternal risk factors explained the reduction in stillbirth at GA ≤39 weeks but not at ≥40 weeks. The rise in labour induction and caesarean delivery rates did not explain the reduction in stillbirth ≥40 weeks of gestation.

Combining expert elicitation and stated preference methods to value ecosystem services from improved lake water quality

With increasing attention on the contribution of ecosystems to human well-being, there is a need for tools that integrate ecological and economic models for valuing ecosystem services. To address this, we develop a protocol for linking ecological processes and outcomes to human preferences, which combines environmental modeling, expert elicitation, and nonmarket valuation methods. Our application values reductions in nutrient loads to lakes in the southeastern US. The innovation centers on how biochemical measures of water quality (e.g., chlorophyll a) are translated into terms that are meaningful to individuals who derive ecosystem services from them. Using expert elicitation data, we estimate a model linking changes in biochemical measures to an index of eutrophication in lakes. We then develop a stated preference survey including (a) detailed descriptions of the perceptible outcomes – e.g., water color, clarity – associated each eutrophication index level; and (b) policy scenarios involving state-level changes in lake eutrophication conditions. We estimate a function that predicts households' willingness to pay for changes in lake water quality. We demonstrate the protocol through a case study examining the benefits of lake quality improvement in Virginia as a result of recent policies to reduce nutrient loads in the Chesapeake Bay watershed.

Coastal Building Codes and Hurricane Damage

We explore whether federal- and state-level changes to coastal building standards were effective in mitigating losses to coastal property following Hurricane Charley. We find properties built seaward of and after the reestablishment of the Coastal Construction Control Line, and those built under the National Flood Insurance Program and located in an A-Zone, had more damage relative to similarly located structures built before these regulatory changes. We show the NFIP regulations allowed for weaker foundation requirements and lower elevations relative to the earlier county code. This likely led to greater flood damage, as supported by analysis of individual structural components. <i>(JEL Q54, Q58)</i>

It takes a Federalist Village: A Revitalized Property Tax as the Linchpin for Stable, Effective K-12 Public Education Funding

Undeniable intra-state, inter-district disparities in funding public K-12 education were not explicitly litigated in the federal courts prior to San Antonio v. Rodriguez. The plaintiffs’ attorneys in the Brown cases were quite strategic in presenting the case against the Topeka School Board as lead case; the Topeka public school facility was structurally equal to public schools attended by Linda Brown’s white counterparts. With funding inequities unavailable as an issue, The United States Supreme Court unequivocally declared in that case that “segregated schools are inherently unequal.” It was not until 1973 that disparate funding was addressed directly by the Court. In San Antonio v. Rodriguez, the last federal case explicitly challenging the constitutionality of funding disparities driven by principle reliance on the ad valorem property tax, the Court held that a school-financing system based on local property taxes was not an unconstitutional violation of the Fourteenth Amendment’s equal protection clause. Though the funding disparities between the two school Texas districts were stark, the plaintiffs in that case unsuccessfully argued that education is a fundamental right under the US Constitution and that a school funding system predicated upon local property taxes that impacted lower income groups created a suspect classification subject to strict scrutiny there under. From that point forward, state supreme courts became the fora in which such questions were litigated with both notable successes and equally notable failures. Whatever the litigation outcome, (and predicated on language in state constitutions that almost without exception guaranteed a public education to state residents) observable state level changes in the allocation of responsibility for funding public education have followed in Rodriguez’s wake. From heavy reliance by local school districts on local property taxes for funding, increasing state participation in financial support for public education opened state tills funded primarily through retail sales taxes and state individual taxes. In so doing, funding from property tax revenues that had proven relatively stable though inadequate because of great variations in the value of underlying tax rolls, was supplemented and in at least one instance replaced by state funding (Hawaii). This more explicitly shared responsibility has had mixed results; state funding has resulted in increased support during periods of general economic expansion but has declined during recessionary periods. Recent data show a general national pattern of reduced state support dating from the inception of the recession of 2008. In short, increased funding has proven unstable because of the greater comparative revenue elasticity of state revenue sources vis-a-vis that of the property tax. Funding for public education must be stabilized. Because public education is such a huge undertaking, all levels of government must play a role in achieving that financial stability. As such, policymakers must be aware of the differences between property taxes, state retail sales taxes, and state income taxes as funding sources and should develop funding packages that take the best financial advantage of each source. This essay briefly summarizes the differences between these revenue sources, highlighting factors that presently affect revenue capacity. I explore ways in which to better craft funding packages with particular attention to the local and state roles in this effort. I argue that a key element will be an effectively revitalized property tax, immunized from a wide array of constraints originating at the state level that have compromised its potential for revenue productivity. I argue that the state role is twofold: (1) enacting legislation protective of property tax revenues as a critical element of funding and (2) allocating from state general revenues, support critical to achieving adequate and equitable education. An important part of the discussion of the state role is an examination of the pitfalls of earmarking revenues such as gaming proceeds for public education. I warn against such reliance. Finally, I distinguish between indirect and direct support provided by the federal government for public education. I argue that indirect federal support for public education can be increased by enacting a credit for property taxes paid to support public education along with a credit for charitable contributions made to support foundations serving poorer public schools. I note that the limited direct federal support provided to public schools has been earmarked for designated purposes and is likely to remain both limited and earmarked.