CES-WP-09-19
Did Vietnam Veterans Get Sicker in the 1990s? The Complicated Effects of Military Service on Self-Reported Health
Joshua Angrist, Stacey Chen, Brigham Frandsen
August 01, 2009
The veterans disability compensation (VDC) program, which provides a monthly stipend
to disabled veterans, is the third largest American disability insurance program. Since the late
1990s, VDC growth has been driven primarily by an increase in claims from Vietnam veterans,
raising concerns about costs as well as health. We use the draft lottery to study the long-term
effects of Vietnam-era military service on health and work in the 2000 Census. These estimates
show no significant overall effects on employment or work-related disability status, with a small
effect on non-work-related disability for whites. On the other hand, estimates for white men with
low earnings potential show a large negative impact on employment and a marked increase in
non-work-related disability rates. The differential impact of Vietnam-era service on low-skill
men cannot be explained by more combat or war-theatre exposure for the least educated, leaving
the relative attractiveness of VDC for less skilled men and the work disincentives embedded in
the VDC system as a likely explanation.
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CES-WP-09-18
The Margins of U.S. Trade (Long Version)
Andrew Bernard, J Bradford Jensen, Stephen Redding, Peter Schott
August 01, 2009
Recent research in international trade emphasizes the importance of firms extensive
margins for understanding overall patterns of trade as well as how firms respond to specific
events such as trade liberalization. In this paper, we use detailed U.S. trade statistics to provide a broad overview of how the margins of trade contribute to variation in U.S. imports and exports across trading partners, types of trade (i.e., arm’s-length versus related-party) and both short and long time horizons. Among other results, we highlight the differential behavior of related-party and arm’s-length trade in response to the 1997 Asian financial crisis.
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CES-WP-09-17
Long Term Effects of Military Service on the Distribution of Earnings
Brigham Frandsen
August 01, 2009
I estimate the long term effect of military service on quantiles of earnings and education
using the Vietnam draft lottery eligibility status as an instrument. I compare the local quantile
treatment effect estimator studied by Abadie, Angrist, and Imbens (2002) to the instrumental
variables quantile regression technique developed by Chernozhukov and Hansen (2008).
Ordinary quantile regression shows a large negative association between service in Vietnam and
earnings of white men, with the effect increasing in magnitude for the upper quantiles. Quantile
treatment effects estimates show the opposite pattern, although much smaller in magnitude, with
a small negative effect at the lower end of the distribution, and a small positive effect at the
upper end. This suggests the ordinary quantile result is due to heterogeneous selection effects.
The two methods of quantile treatment effects estimation give similar results.
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CES-WP-09-16
Concentration Levels in the U.S. Advertising and Marketing Services Industry: Myth vs. Reality
Alvin Silk, Charles King III
August 01, 2009
We analyze changes in concentration levels in the U.S. Advertising and Marketing Services
industry using data from the U.S. Census Bureau’s quinquennial Economic Census and the
Service Annual Survey. Heretofore largely ignored, these data allow us to redress some of the
measurement problems surrounding estimates found in the existing literature Firm level
concentration as measured by the Herfindahl-Hirschman Index varies across the sectors
comprising the industry, but all are within the range generally considered as indicative of a
competitive industry. At the holding company level, the four largest organizations account for
about a quarter of the industry’s total revenue, a share lower by an order of magnitude than that
frequently cited in the trade press.
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CES-WP-09-15
Economic Factors Underlying the Unbundling of Advertising Agency Services
Mohammad Arzaghi, Ernst Berndt, James Davis, Alvin Silk
August 01, 2009
This paper addresses a longstanding puzzle involving the unbundling of services that has
occurred over more than two decades in the U.S. advertising agency industry: How can the shift
from the bundling to the unbundling of services be explained and what accounts for the slow
pace of change? Using a cost-based theoretical framework of bundling due to Evans and Salinger
(2005, 2008), we develop a simple model of an advertising agency’s decision to unbundle its
services as a tradeoff between the fixed cost to the advertiser of establishing and maintaining a
relationship with an advertising agency and pecuniary economies of scale available in providing
media services. The results from an econometric analysis of cross-sectional and pooled data
collected by the U.S. Census Bureau for quinquenial censuses conducted between 1982 and 2002
support the key predictions of the model. We find that advertising agency establishments are
more likely to unbundle if they are large and diversified in their service offerings and are less
likely to do so with increasing age and greater geographical scope. We also find a strong trend
toward unbundling over time, a result that is partially explained by increases in media prices
over time.
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