Sunday, April 9, 2017

What happens when you suddenly offer parents generous family leave benefits, paid at the expense of the government? People die

See Perfectly Nice Policies, With Less-Nice Side Effects. Excerpts:
"What happens when you suddenly offer parents generous family leave benefits, paid at the expense of the government? You can probably think of dozens of outcomes. But here’s one you might not have been expecting: people die.

That’s the finding of Benjamin Friedrich and Martin Hackmann, in a new working paper at the National Bureau of Economic Research. The culprit? Nurses, who skew female, provide a lot of vital health care, and made heavy use of Denmark’s new paid family leave benefit when it passed in 1994. Since the supply of nurses was limited, and their skills could not easily be replaced, hospital readmissions went up, and more troublingly, mortality spiked among elderly patients in nursing homes."

"When parental leave came along, it reduced the supply of nurses. But that impact wasn’t felt evenly. In hospitals, where doctors make more of the medical decisions, it seems to have been costly to patient health. But in nursing homes, where nursing staff have more power over daily operations, it seems to have made a much bigger difference."

"It isn’t enough to know how many workers you might have who might take advantage of the policy. You also need to know how vital their work is to the enterprise, and how readily the enterprise could adapt to their absence. What regulatory or structural barriers might exist to prevent you from rapidly training extra workers?

It may not be possible to know this in advance. Nursing administrators may find it easy to deal with temporary shortages by enticing retired nurses to temporarily return to the profession, or getting their existing staff to work overtime. It is only in the face of a sustained, large and widespread supply shock that those traditional resources will prove completely inadequate.

Moreover, even if we knew what the impact was likely to be, we probably don’t have exact estimates of the practical effects of suddenly slashing the supply of licensed professionals, like teachers and nurses, who will be hard to replace. I mean, we can probably hazard a guess that fewer teachers and nurses means sicker patients and kids who can’t read as well. But how big will the change actually be?"

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