Note: This transcript has been created with a combination of machine ears and human eyes. There may be small differences between this document and the audio version, which is one of many reasons we encourage you to listen to the episode!

Dan Gorenstein: School’s wrapping up. The sun is shining. The ocean is calling. And for America’s health economists, that can only mean one thing.

Sayeh Nikpay: It’s time for ASHEcon, baby!

DG: Put down that popsicle. Pick up that laser pointer. Today, exciting new research from one of the premier health economics conferences. From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein. This is Tradeoffs.

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DG: We’re joined by Tradeoffs Senior Research Advisor and University of Minnesota health economist Sayeh Nikpay. Welcome back, Sayeh.

SN: Thanks, Dan. Nice to see you.

DG: And I hear some congrats are in order. You’re officially a tenured professor? Big stuff! 

SN: Guess the news is out of the bag. Thanks so much.

DG: It must be a huge relief and you must be really excited that you’re a tenured professor.

SN: Very excited and very tired. It’s been many years.

DG: Very cool. So look Sayeh — again congratulations — next week is the annual meeting of the American Society of Health Economists, also known as ASHEcon.

And we asked you to wade through some of the many, many studies being presented there. Actually, do you know exactly how many there are?

SN: So I asked the organizers for the official count and it’s a whopping 637 new pieces of research. 

DG: That is astounding and I hope we didn’t ruin too many of your weekends with this assignment.

SN: Oh, no actually it was just a couple of super long transatlantic flights, so it’s all good. It was either reading abstracts or watching Top Gun for nine hours straight.

DG: Yes, right. Definitely. Abstracts top, top Gun. Ten times out of ten. So here you are. You’ve got your papers, you’ve got your favorite studies. What do we start with?

SN: So this first paper is by Mark Meiselbach of Johns Hopkins and Jean Abraham of my very own University of Minnesota. Not trying to stack the deck by picking my own colleague, Dan, it only happened because I covered up the authors of all these abstracts before I reviewed them!

DG: The more people from the Land of 10,000 Lakes, the better. So tell me, what’s it all about?

SN: Well lucky for me, it combines a couple of economists’ favorite topics: minimum wage laws and employer-sponsored health insurance.

DG: Oofta! That was a little Minnesota reference for you there, Sayeh.

SN: Yes, thank you! I feel seen! 

DG: But that is a wonky one-two punch right out of the gate.

SN: I know, but these issues also affect a ton of people. I mean, more than 150 million of us get health insurance through work including me. And about 1 in 3 workers in the U.S. make less than 15 dollars an hour. So this study tackles this kind of perennial debate that comes up when states or even Congress consider raising the minimum wage.

News montage: Crowd: Hey McDonalds, you can’t hide, we can see your greedy side // Trump: We have to help our small businesses. How are you helping small businesses when you’re forcing wages? // Sanders: $7.25 an hour is a starvation wage. That’s what it is. 

DG: Ah yes, the age old will higher wages actually be bad for workers debate.

SN: Right, and there’s actually a puzzle here, Dan, because economic theory tells us that increasing the minimum wage should cause businesses to cut jobs. But loads of real world data shows us that they actually don’t do that. One possibility here is that employers are actually just responding to these laws in some other way than cutting jobs. And this paper shows that yes, indeed they are.

DG: Interesting. So if they’re not laying people off then how are they — pardon the pun — compensating for this rise in wages? 

SN: Very good, Dan. What these researchers find, Dan, is that for every one dollar a state’s minimum wage goes up, we see fewer employers offer health insurance — almost a one percentage point decrease. 

DG: Got it. So instead of laying people off, these employers are paring back their benefits.

SN: Exactly, and not surprisingly, we’re more likely to see this reaction at small employers and those with a lot of low wage workers — precisely the kinds of businesses most sensitive to the effects of these laws and to the price of health insurance.

DG: Which, I think last I checked, now costs employers something like 16 grand a year to cover a worker and their family, right?

SN: Yeah, now there is an oofta! And among those firms that do still offer health insurance, the study’s authors find that they tend to actually raise their deductibles. It’s not by a lot, but it’s a little. Overall, though, what’s heartening is that this paper finds that there’s no change in the uninsured rate in states that pass these minimum wage mandates.

DG: Wow, so that means people are finding insurance somewhere else when their boss stops offering it. Sayeh, what’s the big takeaway for policymakers who might be considering a minimum wage hike?

SN: Well, there’s a lot of good reasons to raise people’s pay. I think that’s why state policymakers are thinking about this a lot. But if lawmakers do it, they might want to bolster people’s insurance options outside of work. That could mean bigger state subsidies in the ACA marketplace or maybe, expanding Medicaid.

DG: Help soften the blow for workers whose employers do back out of the insurance game.

SN: Yep.

DG: Okay, strong first paper. What’s next?

SN: So this second paper is about something you guys don’t talk about much on Tradeoffs. It’s about cooking. And just to warn you now, Dan, it’s kind of sad. 

DG: Okay, alright. I’m ready.

SN: It’s by Thomas Thivillon from the Bordeaux School of Economics in France. And in it, Thomas looks at this push that the country of Peru made in 2012 to get more families to stop cooking by burning wood — something a lot of the developing world still relies on. It pollutes the air and can be dangerous to breathe, especially for kids. So the government started giving away these vouchers to low income families to buy and cook with a kind of gas called liquified petroleum instead.

DG: Makes sense — kind of like how we here in the U.S. subsidize cleaner electric cars or solar energy.

SN: Right, and these subsidies worked like a charm! People were 150% more likely to use gas as a result.

DG: I’m sensing a ‘but’…

SN: Yeah, here it is, Dan. Unfortunately, the author finds that this program — a program explicitly designed to improve child health — had these terrible unintended consequences. Babies from families who got these subsidies were actually 15 percent more likely to die. Between 2010 and 2020, the author estimates this policy might have been responsible for as many as 6,600 extra deaths. 

DG: That is terrible.

SN: Yeah, and the paper also finds higher rates of respiratory infections in kids and anemia in adult women in these homes that switched to gas.

DG: Sayeh, this just sounds like the ultimate case of a well intentioned policy gone terribly wrong. Do we have any idea why it went so bad? I’m guessing policymakers were going off some evidence that gas is a cleaner and healthier option.

SN: Yeah they did. I mean this is a policy idea endorsed by the UN and the World Health Organization. The data suggest biomass cooking, where you burn wood or other stuff, releases at least 10 times more of this one especially dangerous air polluting particle compared to gas.

DG: So switching seems like kind of a no brainer. 

SN: That’s right. But the hitch here, Dan, is that gas also emits some of its own nasty byproducts. And this study basically finds that in designing this policy, Peru focused on what people were cooking with — not where they were cooking. Before these subsidies arrived, most of these families cooked outdoors.

DG: Got it. So there may have been some bad stuff in the air, but at least it was outside.

SN: Exactly. When they started using gas, they were more likely to move their cooking inside. And the study finds this policy’s negative effects hit homes with no ventilation the hardest.

DG: I guess my last question here, Sayeh, is obviously this study is a good reminder for all policymakers to really think through potential unintended consequences. But are there other more specific takeaways for people in the U.S.?

SN: Yeah I think there are. Policymakers here are also grappling with a growing body of research around the potential dangers of gas stoves both for our indoor air quality and our climate. Dozens of cities in California, New York and Massachusetts have passed bans on gas appliance hookups in new buildings. I will say, for me personally, reading this study was enough of a nudge to get me to talk to my husband, who loves cooking with gas, to consider some non-gas options for our own home.

DG: Very good, Sayeh, Thanks for sharing that surprising and really sobering study. Just one paper left, and we’ll tackle it after the break.

MIDROLL

DG: Welcome back. We’re rejoined by University of Minnesota health economist Sayeh Nikpay. She’s a longtime friend of the pod and today, she’s giving us a preview of some of exciting new health economics research — papers that will be presented next week at ASHEcon, a major meeting of the country’s health economists. So Sayeh, this year’s meeting is in St. Louis, the ol’ Gateway to the West. Before we get back to the papers, do you have a piece of trivia or a hot tip to share with people heading there next week?

Sayeh: So this isn’t about St. Louis itself, but a fun fact is I’m actually driving 9 hours to ASHE in a minivan full of grad students. 

DG: Good Lord. Then you’re going to love my tip because you’re going to need it. There is this amazing bar called the Venice Cafe. It is full of the most strange and beautiful things all over the wall. It’s got a flowing fountain in the basement. Truly a one of a kind watering hole, which is my favorite thing.

SN: That sounds great. See you there for a beer next week?

DG: Probably two or three after the last couple of weeks I’ve been having.

SN: We might end up in the fountain!

DG: It is small. Okay, so we’ve got one paper left on your list of faves. What’s this one all about?