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Message from the director

The first year of existence of the Center for Economics & Public Policy has been filled with inaugural activities and planning for future events.

One of our central goals is to contribute to informed public debate about economics-related public policy issues at the national and state level as well as at UCI and in the local community. To that end, we hosted two lectures by prominent experts on critical national policy issues. In November, Alan Auerbach, Robert D. Burch Professor of Economics and Law from the University of California, Berkeley, gave a public lecture on long-term fiscal challenges to the United States. The timing was impeccable as his lecture coincided with the most recent round of political brinksmanship on cutting the deficit and national debt. Auerbach's lecture emphasized the critical importance of reining in the growth of Social Security and even more so Medicare spending, and outlined the kinds of tax increases and spending cuts needed to move the United States to a fiscally-sound long-term trajectory. The lecture was sobering in highlighting the far more extensive changes needed than any that have yet received serious consideration in Washington.

In May, Casey Mulligan, economics professor from the University of Chicago, gave a lecture on the Great Recession and how government redistributive policies have increased its severity. Delivered to a standing-room-only crowd of students and community leaders, Mulligan outlined how well-intentioned efforts to cushion the blow of the Great Recession, such as increased generosity of the social safety net and assistance to homeowners struggling with mortgages, have inadvertently reduced the economic returns to work. As a result, he argues that employment growth has remained well below what would have been expected based solely on the impact of the initial causes of the Great Recession. In other words, these policies to help families deal with the Great Recession have made the recession worse. The controversial views Mulligan presented led to a lively and stimulating exchange with the audience, which continued over an informal dinner with community leaders.

CEPP also endeavors to encourage UCI faculty and students to engage in research related to economics and public policy. In support of this goal, financial awards from a program funded by Steven Borowski '79 were made to three students - two Ph.D. students and one undergraduate student - in support of research on transportation policy. CEPP also sponsored two research seminars for faculty and graduate students in the social sciences: one on immigration policy by Magnus Lofstrom, fellow of the Public Policy Institute of California, and one by Jon Sonstelie, economics professor at the University of California, Santa Barbara.

This newsletter is the very first stage in the third leg of the center's efforts - to communicate the findings from research on economics and public policy to the policy community. In the newsletter, you will find links to recent working papers by CEPP research affiliates. You will also find numerous links to newspaper stories and other descriptions of policy-relevant research by these same faculty, as well as op-eds and policy memos by faculty affiliates:

• Studies
• Working Papers
• Policy Memos
• Op-eds
• Video & Audio

STUDIES

Healthcare costs decrease over time when low-income uninsured are provided coverage, study finds

Study co-authored by economist David Neumark published in Health Affairs

Enrollment of uninsured patients in a program with benefits comparable to those offered under the Affordable Care Act of 2010 resulted in significant healthcare cost savings, a new study finds. Published in the February 2012 issue of Health Affairs, the research sheds light on the potential outcomes of newly enacted healthcare reforms.

New study ties Mexican American educational attainment gap to grandparent legal status

Findings presented at international immigration conference in D.C.

According to new research by Frank D. Bean, sociology Chancellor's Professor, pathways to legalization and citizenship appear to take on greater significance for overcoming disadvantages in Mexican American educational attainment than previously thought.

Surprising findings from minimum wage critic

Study by UCI economist finds merits behind higher minimum wage - when coupled with Earned Income Tax Credit

In a study published in the July 2011 issue of Industrial and Labor Relations Review, UCI economist David Neumark finds that a high minimum wage, when coupled with the Earned Income Tax Credit (EITC), increases employment and earnings among single mothers, especially those with very low family incomes. The findings are surprising, says Neumark, given that most of his work has focused on the adverse effects of minimum wages on low-skilled workers.

Study: California's economic climate is sunnier than previously thought

UCI economist David Neumark finds non-policy factors such as weather and geography play greater role in predicting states' economic growth than traditional business climate index measures

Location, location, location. That's what UC Irvine economics Chancellor's Professor David Neumark says is key to understanding how California's economy has managed to stay in line with or surpass the national growth average, despite the Golden State's less than favorable rankings in popular business climate indexes.

WORKING PAPERS

• Fiscal Zoning, Sales Taxes, and Employment: Do Higher Sales Taxes Lead to More Jobs in Retailing and Fewer Jobs in Manufacturing?
  Daria Burnes, Ph.D. | David Neumark, UC Irvine, NBER, and IZA | Michelle J. White, UC San Diego, CKGSB, and NBER
• Immigrants, Welfare Reform, and the U.S. Safety Net
  Marianne Bitler, UC Irvine | Hilary W. Hoynes, UC Davis
• Unstable Inflation Targets
  William A. Branch, UC Irvine | George W. Evans, University of Oregon and University of St. Andrews

POLICY MEMOS

• Future skill shortages in the U.S. economy? Sorting out the evidence
  David Neumark, Economics
• Rising inequality and children's life chances
  Greg Duncan, Education
• Restricting capacity in medical care
  Amihai Glazer, Economics

OP-EDS

• Economic inequality: The real cause of the urban school problem
  Greg Duncan, Education, Chicago Tribune
• Enterprise zone program too costly to keep as is
  David Neumark, Economics, San Francisco Chronicle

VIDEO & AUDIO

• Video: Gauging state business climate
• Audio: Is the minimum wage too low?
• Audio: Orange County's proposed Great Park can't use tax revenues as funding, California says
• Audio: Raising the minimum wage: Who does it help?
• Audio: California poverty rate 16.3 percent in 2010, highest in nation