Essays in Health Economics

This dissertation contains three essays about the economics of health and health care. The chapters that follow consider health inputs through multiple channels, including health care providers and family structure. Motivated by extraordinary growth in the outpatient surgery market in the past 30 years, the first chapter examines ambulatory surgery centers (ASCs) as an alternative to outpatient surgery in hospitals. For a national sample of Medicare patients that varies over time and controlling for physician fixed effects, we show that ASCs treat healthier patients than hospital outpatient departments. Using the variation in ASC use generated by exogenous changes in Medicare payments, we find that treatment in an ASC is associated with better health outcomes, holding patient risk constant. These results suggest that health policy planners have to trade off the superior and cheaper treatment in ASCs against the subsidy outpatient surgeries provide to hospitals.

The second chapter examines the effects of minimum nurse staffing legislation in California on labor market outcomes for registered nurses (RNs). Using annual financial data from California hospitals, I find that nurse-to-patient ratios in California hospitals increased substantially following the staffing mandate. However, individual-level survey data indicate that the law had no effect on the aggregate number of RNs or the hours they worked in California hospitals, and at most a modest effect on wages. My findings suggest that offsetting changes due to hospital closures and shifting staff within hospitals mitigated employment effects of the mandated minimum staffing legislation.

The final chapter investigates the effect of the age difference between siblings (spacing) on educational achievement. Because spacing may be endogenous, we use an instrumental variables strategy that exploits variation in spacing driven by miscarriages. The results indicate that a one-year increase in spacing increases test scores for older siblings by about 0.17 standard deviations. These results are larger than ordinary least squares estimates, suggesting that failing to account for the endogeneity of spacing may understate its benefits. For younger siblings, we find no causal impact of spacing on test scores.