The Advantage of Being Oneself: The Role of Applicant Self-Verification in Organizational Hiring Decisions. Celia Moore et al. Journal of Applied Psychology, https://www.ncbi.nlm.nih.gov/pubmed/28639809
Abstract: In this paper, we explore whether individuals who strive to self-verify flourish or flounder on the job market. Using placement data from 2 very different field samples, we found that individuals rated by the organization as being in the top 10% of candidates were significantly more likely to receive a job offer if they have a stronger drive to self-verify. A third study, using a quasi-experimental design, explored the mechanism behind this effect and tested whether individuals who are high and low on this disposition communicate differently in a structured mock job interview. Text analysis (LIWC) of interview transcripts revealed systematic differences in candidates’ language use as a function of their self-verification drives. These differences led an expert rater to perceive candidates with a strong drive to self-verify as less inauthentic and less misrepresentative than their low self-verifying peers, making her more likely to recommend these candidates for a job. Taken together, our results suggest that authentic self-presentation is an unidentified route to success on the job market, amplifying the chances that high-quality candidates can convert organizations’ positive evaluations into tangible job offers. We discuss implications for job applicants, organizations, and the labor market.
Saturday, July 29, 2017
Does Culture Pay? Compensating Differentials, Job Satisfaction, and Organizational Practices
Does Culture Pay? Compensating Differentials, Job Satisfaction, and Organizational Practices. By Christos Andreas Makridis. Stanford Working Paper, June 2017, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2990210
Abstract: Work-place practices are becoming an increasingly important mechanism for retaining and motivating employees. Using a new survey tool in partnership with PayScale.com between 2014 and 2016, I first document new facts about the dispersion of employee engagement and organizational practices in the labor market, and, secondly, recover a willingness to pay for these amenities. I show that the provision of these amenities creates a time-varying, firm-specific rent that amplifies traditional selection problems. My identification strategy exploits variation in employees’ outside option, which is uncorrelated with contemporaneous organizational factors, but still capitalizes work-place amenities. My estimates imply that employees are willing to pay 2% of their earnings for a standard deviation rise in organizational practices. Through a back-of-the-envelope calculation, I show that these amenities have a benefit-cost ratio of 1.4.
Keywords: Organizational practices, job satisfaction, turnover, compensating differentials, productivity.
JEL: L20, M51, M52, M54, M55
Abstract: Work-place practices are becoming an increasingly important mechanism for retaining and motivating employees. Using a new survey tool in partnership with PayScale.com between 2014 and 2016, I first document new facts about the dispersion of employee engagement and organizational practices in the labor market, and, secondly, recover a willingness to pay for these amenities. I show that the provision of these amenities creates a time-varying, firm-specific rent that amplifies traditional selection problems. My identification strategy exploits variation in employees’ outside option, which is uncorrelated with contemporaneous organizational factors, but still capitalizes work-place amenities. My estimates imply that employees are willing to pay 2% of their earnings for a standard deviation rise in organizational practices. Through a back-of-the-envelope calculation, I show that these amenities have a benefit-cost ratio of 1.4.
Keywords: Organizational practices, job satisfaction, turnover, compensating differentials, productivity.
JEL: L20, M51, M52, M54, M55
Poisoned Praise: Discounted Praise Backfires and Undermines Subordinate Impressions in the Minds of the Powerful
Poisoned Praise: Discounted Praise Backfires and Undermines Subordinate Impressions in the Minds of the Powerful. Jonathan Kunstman, Christina Fitzpatrick & Pamela Smith
Social Psychological and Personality Science, http://journals.sagepub.com/doi/abs/10.1177/1948550617712028?journalCode=sppa
Abstract: High-power people frequently receive compliments from subordinates, yet little is known about how high-power people respond to praise. The current research addresses this gap in the empirical literature by testing the primary hypothesis that high-power people discount others’ praise more than equal- and low-power people. Secondary hypotheses also tested whether high-power people’s tendency to discount positive feedback would paradoxically heighten negative perceptions of others. Evidence from two experiments (one preregistered) reveals that high-power participants discounted feedback from others more than low- and equal-power participants. However, high-power people’s tendency to discount feedback only produced negative partner perceptions when positive feedback, but not neutral feedback, was discounted. These results suggest that compliments may sometimes backfire and lead high-power people to discount praise and form negative impressions of subordinates.
Social Psychological and Personality Science, http://journals.sagepub.com/doi/abs/10.1177/1948550617712028?journalCode=sppa
Abstract: High-power people frequently receive compliments from subordinates, yet little is known about how high-power people respond to praise. The current research addresses this gap in the empirical literature by testing the primary hypothesis that high-power people discount others’ praise more than equal- and low-power people. Secondary hypotheses also tested whether high-power people’s tendency to discount positive feedback would paradoxically heighten negative perceptions of others. Evidence from two experiments (one preregistered) reveals that high-power participants discounted feedback from others more than low- and equal-power participants. However, high-power people’s tendency to discount feedback only produced negative partner perceptions when positive feedback, but not neutral feedback, was discounted. These results suggest that compliments may sometimes backfire and lead high-power people to discount praise and form negative impressions of subordinates.
Social-Recognition versus Financial Incentives? Exploring the Effects of Creativity-Contingent External Rewards on Creative Performance
Social-Recognition versus Financial Incentives? Exploring the Effects of Creativity-Contingent External Rewards on Creative Performance. Ravi Mehta, Darren Dahl & Rui (Juliet) Zhu. Journal of Consumer Research, https://academic.oup.com/jcr/article-abstract/doi/10.1093/jcr/ucx062/3738819/Social-Recognition-versus-Financial-Incentives?redirectedFrom=fulltext
Abstract: The present work examines the role of creativity-contingent monetary versus social-recognition rewards on creative performance and provides new insights into the underlying motivational processes through which these rewards affect consumer creativity. A series of five studies demonstrate that within the context of creativity contingency, monetary rewards induce a performance focus, while social-recognition rewards induce a normative focus. Such performance (normative) focus in turn enhances (attenuates) approach motivation to be original and hence leads to higher (lower) originality in a creative task. Thus, this work not only advances the current understanding of how and why two types of widely used creativity-contingent external rewards may have contrasting effects on creative performance, but it also offers important practical insights to managers who utilize reward systems in cultivating consumer creativity in their innovation platforms.
Keywords: creativity, innovation, approach motivation, monetary rewards, normative focus, social-recognition rewards
Abstract: The present work examines the role of creativity-contingent monetary versus social-recognition rewards on creative performance and provides new insights into the underlying motivational processes through which these rewards affect consumer creativity. A series of five studies demonstrate that within the context of creativity contingency, monetary rewards induce a performance focus, while social-recognition rewards induce a normative focus. Such performance (normative) focus in turn enhances (attenuates) approach motivation to be original and hence leads to higher (lower) originality in a creative task. Thus, this work not only advances the current understanding of how and why two types of widely used creativity-contingent external rewards may have contrasting effects on creative performance, but it also offers important practical insights to managers who utilize reward systems in cultivating consumer creativity in their innovation platforms.
Keywords: creativity, innovation, approach motivation, monetary rewards, normative focus, social-recognition rewards
Cyclical Population Dynamics of Automatic Versus Controlled Processing: An Evolutionary Pendulum
Cyclical Population Dynamics of Automatic Versus Controlled Processing: An Evolutionary Pendulum. David Rand et al. Psychological Review, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2972420
Abstract: Psychologists, neuroscientists, and economists often conceptualize decisions as arising from processes that lie along a continuum from automatic (i.e., “hardwired” or overlearned, but relatively inflexible) to controlled (less efficient and effortful, but more flexible). Control is central to human cognition, and plays a key role in our ability to modify the world to suit our needs. Given its advantages, reliance on controlled processing may seem predestined to increase within the population over time. Here, we examine whether this is so by introducing an evolutionary game theoretic model of agents that vary in their use of automatic versus controlled processes, and in which cognitive processing modifies the environment in which the agents interact. We find that, under a wide range of parameters and model assumptions, cycles emerge in which the prevalence of each type of processing in the population oscillates between 2 extremes. Rather than inexorably increasing, the emergence of control often creates conditions that lead to its own demise by allowing automaticity to also flourish, thereby undermining the progress made by the initial emergence of controlled processing. We speculate that this observation may have relevance for understanding similar cycles across human history, and may lend insight into some of the circumstances and challenges currently faced by our species.
Abstract: Psychologists, neuroscientists, and economists often conceptualize decisions as arising from processes that lie along a continuum from automatic (i.e., “hardwired” or overlearned, but relatively inflexible) to controlled (less efficient and effortful, but more flexible). Control is central to human cognition, and plays a key role in our ability to modify the world to suit our needs. Given its advantages, reliance on controlled processing may seem predestined to increase within the population over time. Here, we examine whether this is so by introducing an evolutionary game theoretic model of agents that vary in their use of automatic versus controlled processes, and in which cognitive processing modifies the environment in which the agents interact. We find that, under a wide range of parameters and model assumptions, cycles emerge in which the prevalence of each type of processing in the population oscillates between 2 extremes. Rather than inexorably increasing, the emergence of control often creates conditions that lead to its own demise by allowing automaticity to also flourish, thereby undermining the progress made by the initial emergence of controlled processing. We speculate that this observation may have relevance for understanding similar cycles across human history, and may lend insight into some of the circumstances and challenges currently faced by our species.
Numerical Nudging: Using an Accelerating Score to Enhance Performance
Numerical Nudging: Using an Accelerating Score to Enhance Performance. Luxi Shen & Christopher Hsee. Psychological Science, https://www.ncbi.nlm.nih.gov/pubmed/28665190
Abstract: People often encounter inherently meaningless numbers, such as scores in health apps or video games, that increase as they take actions. This research explored how the pattern of change in such numbers influences performance. We found that the key factor is acceleration - namely, whether the number increases at an increasing velocity. Six experiments in both the lab and the field showed that people performed better on an ongoing task if they were presented with a number that increased at an increasing velocity than if they were not presented with such a number or if they were presented with a number that increased at a decreasing or constant velocity. This acceleration effect occurred regardless of the absolute magnitude or the absolute velocity of the number, and even when the number was not tied to any specific rewards. This research shows the potential of numerical nudging - using inherently meaningless numbers to strategically alter behaviors - and is especially relevant in the present age of digital devices.
Abstract: People often encounter inherently meaningless numbers, such as scores in health apps or video games, that increase as they take actions. This research explored how the pattern of change in such numbers influences performance. We found that the key factor is acceleration - namely, whether the number increases at an increasing velocity. Six experiments in both the lab and the field showed that people performed better on an ongoing task if they were presented with a number that increased at an increasing velocity than if they were not presented with such a number or if they were presented with a number that increased at a decreasing or constant velocity. This acceleration effect occurred regardless of the absolute magnitude or the absolute velocity of the number, and even when the number was not tied to any specific rewards. This research shows the potential of numerical nudging - using inherently meaningless numbers to strategically alter behaviors - and is especially relevant in the present age of digital devices.
Chronotype variation drives night-time sentinel-like behaviour in hunter–gatherers
Chronotype variation drives night-time sentinel-like behaviour in hunter–gatherers. David Samson et al. Proceedings of the Royal Society: Biological Sciences, July 12 2017, http://rspb.royalsocietypublishing.org/content/284/1858/20170967
Abstract: Sleep is essential for survival, yet it also represents a time of extreme vulnerability to predation, hostile conspecifics and environmental dangers. To reduce the risks of sleeping, the sentinel hypothesis proposes that group-living animals share the task of vigilance during sleep, with some individuals sleeping while others are awake. To investigate sentinel-like behaviour in sleeping humans, we investigated activity patterns at night among Hadza hunter–gatherers of Tanzania. Using actigraphy, we discovered that all subjects were simultaneously scored as asleep for only 18 min in total over 20 days of observation, with a median of eight individuals awake throughout the night-time period; thus, one or more individuals was awake (or in light stages of sleep) during 99.8% of sampled epochs between when the first person went to sleep and the last person awoke. We show that this asynchrony in activity levels is produced by chronotype variation, and that chronotype covaries with age. Thus, asynchronous periods of wakefulness provide an opportunity for vigilance when sleeping in groups. We propose that throughout human evolution, sleeping groups composed of mixed age classes provided a form of vigilance. Chronotype variation and human sleep architecture (including nocturnal awakenings) in modern populations may therefore represent a legacy of natural selection acting in the past to reduce the dangers of sleep.
Abstract: Sleep is essential for survival, yet it also represents a time of extreme vulnerability to predation, hostile conspecifics and environmental dangers. To reduce the risks of sleeping, the sentinel hypothesis proposes that group-living animals share the task of vigilance during sleep, with some individuals sleeping while others are awake. To investigate sentinel-like behaviour in sleeping humans, we investigated activity patterns at night among Hadza hunter–gatherers of Tanzania. Using actigraphy, we discovered that all subjects were simultaneously scored as asleep for only 18 min in total over 20 days of observation, with a median of eight individuals awake throughout the night-time period; thus, one or more individuals was awake (or in light stages of sleep) during 99.8% of sampled epochs between when the first person went to sleep and the last person awoke. We show that this asynchrony in activity levels is produced by chronotype variation, and that chronotype covaries with age. Thus, asynchronous periods of wakefulness provide an opportunity for vigilance when sleeping in groups. We propose that throughout human evolution, sleeping groups composed of mixed age classes provided a form of vigilance. Chronotype variation and human sleep architecture (including nocturnal awakenings) in modern populations may therefore represent a legacy of natural selection acting in the past to reduce the dangers of sleep.
Only one small sin: How self-construal affects self-control
Only one small sin: How self-construal affects self-control. Janina Steinmetz and Thomas Mussweiler. British Journal of Social Psychology, https://www.ncbi.nlm.nih.gov/pubmed/28653379
Abstract: Past research has shown that self-construal can influence self-control by reducing interdependent people's impulsivity in the presence of peers. We broaden these findings by examining the hypothesis that an interdependent (vs. independent) self-construal fosters self-control even in the absence of peers and for non-impulsive decisions. We further explore whether this effect could be mediated by the more interrelated (vs. isolated) processing style of interdependent (vs. independent) people. Such an interrelated (vs. isolated) processing style of temptations makes the impact of a single temptation more salient and can thereby increase self-control. Study 1 demonstrated that more interdependent participants show more self-control behaviour by refraining from chocolate consumption to secure a monetary benefit. Studies 2a and 2b highlighted a link between self-construal and trait self-control via the processing of temptations. Study 3 suggested that an interrelated (vs. isolated) perspective on temptations could mediate the effect of (primed) self-construal on self-control. Taken together, self-construal shapes self-control across various decision contexts.
Abstract: Past research has shown that self-construal can influence self-control by reducing interdependent people's impulsivity in the presence of peers. We broaden these findings by examining the hypothesis that an interdependent (vs. independent) self-construal fosters self-control even in the absence of peers and for non-impulsive decisions. We further explore whether this effect could be mediated by the more interrelated (vs. isolated) processing style of interdependent (vs. independent) people. Such an interrelated (vs. isolated) processing style of temptations makes the impact of a single temptation more salient and can thereby increase self-control. Study 1 demonstrated that more interdependent participants show more self-control behaviour by refraining from chocolate consumption to secure a monetary benefit. Studies 2a and 2b highlighted a link between self-construal and trait self-control via the processing of temptations. Study 3 suggested that an interrelated (vs. isolated) perspective on temptations could mediate the effect of (primed) self-construal on self-control. Taken together, self-construal shapes self-control across various decision contexts.
Expectations Influence How Emotions Shape Behavior
Expectations Influence How Emotions Shape Behavior. Tamir M, Bigman YE. Emotion, doi: 10.1037/emo0000351. https://www.ncbi.nlm.nih.gov/pubmed/28682088
Abstract: Emotions shape behavior, but there is some debate over the manner in which they do so. The authors propose that how emotions shape behavior depends, in part, on how people expect emotions to shape behavior. In Study 1, angry (vs. calm) participants made more money in a negotiation when they expected anger to be beneficial. In Study 2, angry (vs. calm) participants killed more enemies in a computer game when they expected anger (but not calmness) to promote performance. In Study 3, excited (vs. calm) participants were more creative when they expected excitement to promote performance, whereas calm (vs. excited) participants were more creative when they expected calmness to promote performance. These findings demonstrate that, at least sometimes, what emotions do depends on what we expect them to do.
Abstract: Emotions shape behavior, but there is some debate over the manner in which they do so. The authors propose that how emotions shape behavior depends, in part, on how people expect emotions to shape behavior. In Study 1, angry (vs. calm) participants made more money in a negotiation when they expected anger to be beneficial. In Study 2, angry (vs. calm) participants killed more enemies in a computer game when they expected anger (but not calmness) to promote performance. In Study 3, excited (vs. calm) participants were more creative when they expected excitement to promote performance, whereas calm (vs. excited) participants were more creative when they expected calmness to promote performance. These findings demonstrate that, at least sometimes, what emotions do depends on what we expect them to do.
When My Object Becomes Me: The Mere Ownership of an Object Elevates Domain-Specific Self-Efficacy
When My Object Becomes Me: The Mere Ownership of an Object Elevates Domain-Specific Self-Efficacy. Victoria Wai-lan Yeung et al. Applied Psychology, http://onlinelibrary.wiley.com/doi/10.1111/apps.12099/abstract
Abstract: Past research on the mere ownership effect has shown that when people own an object, they perceive the owned objects more favorably than the comparable non-owned objects. The present research extends this idea, showing that when people own an object functional to the self, they perceive an increase in their self-efficacy. Three studies were conducted to demonstrate this new form of the mere ownership effect. In Study 1, participants reported an increase in their knowledge level by the mere ownership of reading materials (a reading package in Study 1a, and lecture notes in Study 1b). In Study 2, participants reported an increase in their resilience to sleepiness by merely owning a piece of chocolate that purportedly had a sleepiness-combating function. In Study 3, participants who merely owned a flower essence that is claimed to boost creativity reported having higher creativity efficacy. The findings provided insights on how associations with objects alter one's self-perception.
Abstract: Past research on the mere ownership effect has shown that when people own an object, they perceive the owned objects more favorably than the comparable non-owned objects. The present research extends this idea, showing that when people own an object functional to the self, they perceive an increase in their self-efficacy. Three studies were conducted to demonstrate this new form of the mere ownership effect. In Study 1, participants reported an increase in their knowledge level by the mere ownership of reading materials (a reading package in Study 1a, and lecture notes in Study 1b). In Study 2, participants reported an increase in their resilience to sleepiness by merely owning a piece of chocolate that purportedly had a sleepiness-combating function. In Study 3, participants who merely owned a flower essence that is claimed to boost creativity reported having higher creativity efficacy. The findings provided insights on how associations with objects alter one's self-perception.
First Evidence for "The Backup Plan Paradox"
First Evidence for "The Backup Plan Paradox". Christopher Napolitano & Alexandra Freund. Journal of Experimental Psychology: General, https://www.ncbi.nlm.nih.gov/pubmed/28627908
Abstract: This research is a first test of the backup plan paradox. We hypothesized that investing in a backup plan may facilitate the conditions that it was developed to address: Plan A's insufficiency. Five studies provide initial, primarily correlative support for the undermining effect of investing in a backup plan. Study 1 (n= 160) demonstrated that the more participants perceived they had invested in developing a backup plan (preparing a "crib sheet"), the more likely they were to use it, although greater investments were unrelated to backup plan utility. Studies 2-4 used a simulated negotiation task. Study 2 (n = 247) demonstrated that when goal-relevant resources are limited, investing in developing backup plans and perceiving them as highly instrumental can decrease goal performance through the indirect effect of increased means replacing. Study 3 (n = 248) replicated this effect when goal-relevant resources were plentiful. Study 4 (n = 204) used an experimental variant of the simulated negotiation task and demonstrated that simply having a backup plan is not detrimental, but perceiving backup plans to be highly instrumental decreased goal performance, again through the indirect effect of increased means replacing. Study 5 (n = 160) replicated findings from Studies 1-4 using a lab-based motor task (throwing a ball). Together, these results provide first evidence that backup plans can introduce costs that may jeopardize goal performance.
Abstract: This research is a first test of the backup plan paradox. We hypothesized that investing in a backup plan may facilitate the conditions that it was developed to address: Plan A's insufficiency. Five studies provide initial, primarily correlative support for the undermining effect of investing in a backup plan. Study 1 (n= 160) demonstrated that the more participants perceived they had invested in developing a backup plan (preparing a "crib sheet"), the more likely they were to use it, although greater investments were unrelated to backup plan utility. Studies 2-4 used a simulated negotiation task. Study 2 (n = 247) demonstrated that when goal-relevant resources are limited, investing in developing backup plans and perceiving them as highly instrumental can decrease goal performance through the indirect effect of increased means replacing. Study 3 (n = 248) replicated this effect when goal-relevant resources were plentiful. Study 4 (n = 204) used an experimental variant of the simulated negotiation task and demonstrated that simply having a backup plan is not detrimental, but perceiving backup plans to be highly instrumental decreased goal performance, again through the indirect effect of increased means replacing. Study 5 (n = 160) replicated findings from Studies 1-4 using a lab-based motor task (throwing a ball). Together, these results provide first evidence that backup plans can introduce costs that may jeopardize goal performance.
Wolves in sheep’s clothing: Is non-profit status used to signal quality?
Wolves in sheep’s clothing: Is non-profit status used to signal quality? Daniel Jones, Carol Propper & Sarah Smith. Journal of Health Economics, https://doi.org/10.1016/j.jhealeco.2017.06.011
Abstract: Why do many firms in the healthcare sector adopt non-profit status? One argument is that non-profit status serves as a signal of quality when consumers are not well informed. A testable implication is that an increase in consumer information may lead to a reduction in the number of non-profits in a market. We test this idea empirically by exploiting an exogenous increase in consumer information in the US nursing home industry. We find that the information shock led to a reduction in the share of non-profit homes, driven by a combination of home closure and sector switching. The lowest quality non-profits were the most likely to exit. Our results have important implications for the effects of reforms to increase consumer provision in a number of public services.
JEL classification: L31, L38, I18, I11
Keywords: Non-profit, Quality disclosure, Nursing homes
Abstract: Why do many firms in the healthcare sector adopt non-profit status? One argument is that non-profit status serves as a signal of quality when consumers are not well informed. A testable implication is that an increase in consumer information may lead to a reduction in the number of non-profits in a market. We test this idea empirically by exploiting an exogenous increase in consumer information in the US nursing home industry. We find that the information shock led to a reduction in the share of non-profit homes, driven by a combination of home closure and sector switching. The lowest quality non-profits were the most likely to exit. Our results have important implications for the effects of reforms to increase consumer provision in a number of public services.
JEL classification: L31, L38, I18, I11
Keywords: Non-profit, Quality disclosure, Nursing homes
Do Government Subsidies to Low-income Individuals Affect Interstate Migration? Evidence from the Massachusetts Health Care Reform.
Do Government Subsidies to Low-income Individuals Affect Interstate Migration? Evidence from the Massachusetts Health Care Reform. James Alm & Ali Enami. Regional Science and Urban Economics, September 2017, Pages 119-131, http://www.sciencedirect.com/science/article/pii/S0166046216303799
Highlights
• Will low-income individuals move to a state with better health subsidies?
• This paper estimates the migration impact of the 2006 Massachusetts health care reform.
• We use difference-in-differences and triple-differences models, with tax return data.
• We find that the reform had no global effect on the overall movement into the state.
• We also find that the reform had a border effect on cities closest to the state's borders.
Abstract: Following the passage of the Patient Protection and Affordable Care Act (ACA) of 2010, many – but not all – states decided to expand their Medicaid program in line with provisions of the new law. Will low-income individuals respond to the incentives of living in a state with better health subsidies by relocating to the state? This paper addresses this question by examining the population growth rate of low-income individuals in Massachusetts following the Massachusetts Health Care Reform (MHCR) of 2006. Like the ACA, the MHCR expanded the Medicaid program, and also provided subsidized health insurance for low-income individuals. Using difference-in-differences and triple-differences models and Internal Revenue Service tax return data, we show that the reform did not have a global effect on the movement of low-income individuals across all cities in Massachusetts. However, we also show that the reform did have a local (or border) effect on the movement into border cities of the state, an effect that is relatively large for cities very close to the border but disappears quickly once the distance to border goes beyond 15 miles.
JEL classification: H24, I13, J11
Keywords: Massachusetts health care reform, Interstate migration, Medicaid expansion, Subsidized health insurance, Border analysis
Highlights
• Will low-income individuals move to a state with better health subsidies?
• This paper estimates the migration impact of the 2006 Massachusetts health care reform.
• We use difference-in-differences and triple-differences models, with tax return data.
• We find that the reform had no global effect on the overall movement into the state.
• We also find that the reform had a border effect on cities closest to the state's borders.
Abstract: Following the passage of the Patient Protection and Affordable Care Act (ACA) of 2010, many – but not all – states decided to expand their Medicaid program in line with provisions of the new law. Will low-income individuals respond to the incentives of living in a state with better health subsidies by relocating to the state? This paper addresses this question by examining the population growth rate of low-income individuals in Massachusetts following the Massachusetts Health Care Reform (MHCR) of 2006. Like the ACA, the MHCR expanded the Medicaid program, and also provided subsidized health insurance for low-income individuals. Using difference-in-differences and triple-differences models and Internal Revenue Service tax return data, we show that the reform did not have a global effect on the movement of low-income individuals across all cities in Massachusetts. However, we also show that the reform did have a local (or border) effect on the movement into border cities of the state, an effect that is relatively large for cities very close to the border but disappears quickly once the distance to border goes beyond 15 miles.
JEL classification: H24, I13, J11
Keywords: Massachusetts health care reform, Interstate migration, Medicaid expansion, Subsidized health insurance, Border analysis
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