Income Responses to the Affordable Care Act: Evidence from a Premium Tax Credit Notch.

We examine responses to the ACA subsidy for Marketplace health insurance in the first year of subsidy availability. Drawing on federal tax data and focusing on a notch in the schedule where eligibility is lost, we document that taxpayers lowered their income to remain eligible for the subsidy. The observed bunching is modest relative to the size of the notch, which, consistent with larger responses we detect in additional analyses among certain subgroups, is likely explained by significant optimization frictions. Finally, we find suggestive evidence that increased deductions drive some of the response, while reduced labor supply also plays a role.

Relationship between season of birth, temperature exposure, and later life wellbeing.

We study how exposure to extreme temperatures in early periods of child development is related to adult economic outcomes measured 30 y later. Our analysis uses administrative earnings records for over 12 million individuals born in the United States between 1969 and 1977, linked to fine-scale, daily weather data and location and date of birth. We calculate the length of time each individual is exposed to different temperatures in utero and in early childhood, and we estimate flexible regression models that allow for nonlinearities in the relationship between temperature and long-run outcomes. We find that an extra day with mean temperatures above 32 °C in utero and in the first year after birth is associated with a 0.1% reduction in adult annual earnings at age 30. Temperature sensitivity is evident in multiple periods of early development, ranging from the first trimester of gestation to age 6-12 mo. We observe that household air-conditioning adoption, which increased dramatically over the time period studied, mitigates nearly all of the estimated temperature sensitivity.