We estimate the impact of employer-provided retiree health insurance on the rate at which men aged 51-62 enter and exit the labor force and switch jobs. The models estimated are an approximation of the employment decision rules implied by a dynamic stochastic model of employment behavior of...

There is much debate about whether the Medicare Prescription Drug Bill -- the greatest expansion of Medicare benefits since its creation in 1965 -- will improve the health of elderly Americans, and how much it will cost. We model how insurance affects medical care utilization, and subsequently,...

While individual smoking behavior persists over time, it is unknown whether this repeated behavior is due to addiction or individual propensities to smoke. To address this issue, we develop a dynamic empirical model of smoking decisions which explicitly accounts for the impact of previous...

The goal of this paper is to analyze consumer demand in markets with large price uncertainty. We develop a demand model for goods that are subject to habit formation. We show that consumption plans of forward looking individuals depend not only on preferences and current period prices, but also...

This paper addresses estimation of an outcome characterized by mass at zero, significant skewness, and heteroscedasticity. Unlike other approaches suggested recently that require retransformations or arbitrary assumptions about error distributions, our estimation strategy uses sequences of...

We model the employment and medical care decisions of older men who face health risk. The budget constraint incorporates detailed characteristics of health insurance as well as Social Security and private pensions. A man whose health insurance is tied to continued employment with his current...