We use data on health plan choices by employees of Harvard University to compare the benefits of insurance competition with the costs of adverse selection. Moving to a voucher-type system induced significant adverse selection, with a welfare loss of 2 to 4 percent of baseline spending. But increased competition reduced Harvard's premiums by 5 to 8 percent. The premium reductions came from insurer profits, so while Harvard was better off, the net effect for society was only the adverse selection loss. Adverse selection can be minimized by adjusting voucher amounts for individual risk. We discuss how such a system would work.

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The Federal Reserve Board’s Survey of Consumer Finances for 2019 provides insights into the evolution of family income and net worth since the previous time the survey was conducted in 2016. The survey shows that over the 2016–19 period, the median value of real (inflation-adjusted) family income before taxes rose 5 percent, and mean income decreased 3 percent. Real median net worth increased 18 percent, and mean net worth rose 2 percent. This survey marks the first in the aftermath of the Great Recession in which between-survey changes in the median outpaced changes in the mean for either measure, indicating that families in large parts of both distributions enjoyed gains in economic well-being. And, while the data also reveal some disparities in the evolution of income and net worth since 2016 across families differentiated by economic characteristics, such as income or wealth, and demographic characteristics, such as age, education, or race and ethnicity, many groups with historically lower income and net worth saw relatively large gains. This article reviews these and other changes in the financial condition of U.S. families, including developments in assets, liabilities, debt payments, and credit market experiences. The findings in this article do not reflect the effects of the COVID-19 pandemic on family finances, as almost all of the data in the 2019 survey were collected before the onset of the pandemic.

The desegregation of Southern schools following the Supreme Court's 1954 Brown decision was perhaps the most important innovation in U.S. education policy in the 20th century. This paper assesses the effects of desegregation on its intended beneficiaries, black students. In Louisiana, substantial reductions in segregation between 1965 and 1970 were accompanied by large increases in per-pupil funding. This additional funding was used to "level up" school spending in integrated schools to the level previously experienced only in the white schools. The effects of desegregation on the educational experiences of black students differed substantially depending on the black share of enrollment in the district. For historical reasons, blacks in districts with higher black enrollment shares experienced larger increases in funding, compared to their counterparts in lower black enrollment share districts. On the other hand, blacks in high black enrollment share districts saw smaller increases in exposure to whites (who were higher-income). Blacks in high black enrollment share districts experienced larger improvements in educational attainment, suggesting that the increase in funding associated with desegregation was more important than the increased exposure to whites. A simple cost-benefit calculation suggests that the additional school spending was more than offset by higher earnings due to increased educational attainment. Using a different source of variation and methodology, the results of this paper are consistent with earlier work suggesting that desegregation improved educational attainment for blacks and sheds new light on the potential mechanism behind this improvement in Louisiana: increased funding for blacks' schools.