Farmer School of Business lobby

Senior Theses 2016

Bethany Corbett (Adviser: Prof. Melissa Thomasson)

“The Calm Before the Economic Storm: A Study of the Impacts of Macroeconomic Shocks on the Mental Health of Young Adults”

Abstract: This paper examines the effects of business cycle fluctuations on the mental health of teenagers and young adults during the period from 2000 to 2010, which includes the most significant economic downturn in United States history since the Great Depression. Using self-reported survey data from the National Longitudinal Survey of Youth 1997 (NLSY97), this study expands upon the scarce literature relating mental health to macroeconomic shocks by considering only a subset of the population often overlooked in previous studies, young adults. This paper uses a fixed-effect model and controls for other factors that may be related to mental health outcomes aside from the state unemployment rate to reach its conclusion. This study of a young adult sub-sample is consistent with others before it that use adult samples in that as state unemployment rate rises by one percent, people report feeling two percent less calm.

Chris Curme (Adviser: Prof. William Even)

“Same-Sex, Different Response to Marriage: Does Legal Marriage Matter for Same-Sex Couples in the United States?”

Abstract: This thesis addresses the significance of marriage to same-sex cohabitating couples in the United States, 2012-2014, using data from the American Community Survey. We first consider differences in marriage rates between opposite- and same-sex couples and to what extent differences in the probability of marriage between opposite- and same-sex couples decrease when controlling for a couple's degree of access to marriage. The analysis is repeated by age group, considering the benefits of legal marriage at different life stages. We then note same-sex couples are less likely to specialize, have a lower probability of homeownership, and have fewer children than opposite-sex couples. We attempt to answer to what extent these differences are attributable to differences in marriage rates rather than differences in other endowments or behavior through a series of Oaxaca decompositions. We then estimate the effect of marriage, all else equal, on the three household decision variables separately for opposite- and same-sex couples to isolate differences in behavior. Lastly, we compare same-sex marriage effects in states that do and those that do not recognize same-sex marriage and attempt to confront the selection bias embedded in our estimated marriage effects. We claim that smaller marriage effects among same-sex couples may reflect that many had adjusted to their prior lack of access to marriage.

Derek Hoodin (Adviser: Prof. John Bowblis)

“Reinvesting in Quality or Stuffing Shareholders’ Pockets: How Does Providing Care to More Post-Acute Care Patients Impact Quality and Profitability of Nursing Homes?”

Abstract: Nursing homes rely on Medicare, Medicaid, and private-pay patients to cover the cost of the care they provide. During times of economic hardship, state revenue falls and states will often cut Medicaid reimbursement in response to budget shortfalls. In response, many nursing homes have recently turned to higher reimbursed post-acute care patients to increase profitability. Using panel data from 2001 to 2010, this study examines how increased post-acute care patients impact nursing home financial performance, and whether higher earnings from these patients translate into better quality of care. Results show that increased post-acute care is associated with a statistically significant increase in two measures of financial performance. However, results do not show any clear improvement in quality of care as measured by patient health outcomes or increased nurse staff levels. This suggests that nursing homes may be keeping revenue from serving post-acute care patients as shareholder profit.

Brian Jong (Adviser: Prof. Jing Li)

“An Examination of the NAIRU for Subgroups of the Civilian Population (1948-2015)”

Abstract: This paper examines the non-accelerating inflation rate of unemployment (NAIRU) for subgroups of the civilian population between 1948 and 2015. The subgroups that are considered in this study are gender, age, race and job type. The Hodrick-Prescott filter is used to estimate a trend for the NAIRU for each of these subgroups. There are four main findings. First, the NAIRU for each of the subgroups traced a hump-shaped path between 1960 and 2000, similar to that of the overall civilian population. Second, the NAIRU for women fell dramatically in the 1980s. Third, the NAIRUs for younger workers and black people were consistently higher than for older workers and white people respectively from 1948 to 2015. Finally, the NAIRU for part-time workers was significantly higher than full-time workers prior to the 1980s, but fell drastically in 2000. This paper also performs vector auto regressions to evaluate the dynamic interactions between the NAIRUs for the each of the subgroups.

Rebecca Jorgensen (Advisers: Profs. Deborah Fletcher and Charles Moul)

“Moving ‘Pabst’ the Protests: Was Act 10 Necessary Monopoly Regulation or Political Union-Busting?”

Abstract: Wisconsin's 2011 Act 10 eliminated the majority of collective bargaining rights for nearly all public sector employees including teachers. I look at the effect that this policy had on teacher compensation and find that the law decreased total compensation, salary, retirement, and health insurance expenditures uniformly across the state. This study also finds evidence of districts paying smaller percentages of health insurance premiums and selecting less expensive insurance plans. I conclude by examining Act 10's impact on the number of teachers employed. Because no economically significant change in the number of per capita teachers is found, I conclude that the teachers' union was previously able to capture monopoly rents and that Act 10's price ceiling was too severe to generate the efficient outcome or even improve welfare.

Kelsey O’Flaherty (Adviser: Prof. Gregory Niemesh)

“The Causal Impact of Income Inequality on Fertility: Evidence from the 20th Century United States”

Abstract: Fertility acts as the prevailing mechanism in the literature to explain the negative relationship between income inequality and economic growth. However, the first-order relationship between inequality and fertility has received little attention. Existing studies analyze countries in cross-section and arrive at mixed conclusions. In contrast, we use local economies in the United States to estimate the impact of inequality on fertility during a period of substantial compression and then widening of the income distribution. Our findings suggest that during the period of 1940 to 1990 a one standard deviation increase in local inequality led to a 13 percent increase in aggregate fertility, which is consistent with predictions of the Becker and Barro family size model.