In the Workplace with Peter Cappelli and Dan O'Meara

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Complicated Compensation

Season 2019, Ep. 9

There are many pieces to compensation aside from dollar bills that can, to some, be just as important as the numbers on the check. In this episode, hosts Peter Cappelli and Dan O'Meara sit with Nicole Maestas to talk about just how much those other pieces are worth.


Nicole Maestas, PhD, is an associate professor of health care policy at Harvard Medical School. Her research studies how the health and disability insurance systems affect individual economic behaviors, such as labor supply and the consumption of medical care.

Dr. Maestas’ research in disability economics has shown how the federal disability insurance system discourages employment by people with disabilities. Applying a causal research design to newly developed administrative data, her work showed that the work capacity of disability insurance beneficiaries with less severe disabilities is substantial. Furthermore, individuals lose additional work capacity the longer they stay out of the labor force pursuing a disability determination.

Dr. Maestas’ work on the effects of health insurance coverage showed that the onset of Medicare eligibility causes a sharp increase in the use of health care services. For low-cost services, such as routine doctor visits, Medicare eligibility leads to increases in utilization that are concentrated among groups with the lowest rates of insurance coverage prior to age 65. But for relatively high-cost procedures—including hospitalization for procedures like bypass surgery and hip and knee replacement—the gains are concentrated among groups with the highest rates of insurance coverage prior to age 65 (and who are also more likely to have supplementary insurance coverage after 65). As a result, Medicare narrows disparities in access to care, but appears to widen disparities in elective care. Closely related work presented the first causal evidence of an insurance-induced mortality gap: Medicare coverage causes a nearly 1-percentage-point drop in 7-day mortality for patients at age 65, equivalent to a 20% reduction in deaths for this severely ill patient group. Her work on the economics of aging has demonstrated significant shifts in labor supply patterns at older ages. She showed that one-half of all retirees pursue a retirement transition path that involves partial retirement or labor force re-entry (“unretirement”) and that re-entry was largely predictable ex ante, and not a consequence of economic shocks. She has also argued that labor supply at older ages is likely to increase still further, even absent policy changes to promote employment at older ages, due to increased labor demand for older workers. Indeed, her work shows that the rise in employment at older ages was driven in substantial part by an increase in labor demand by firms in the professional services industries. In current work, she is examining how these labor force trends, and population aging more generally, affect economic growth.

Dr. Maestas has testified before Congress about her research on two occasions, once before the U.S. House Ways and Means Committee and once before the Senate Finance Committee. She recently completed service on a national disability policy panel convened by the Social Security Advisory Board.

Dr. Maestas graduated Phi Beta Kappa from Wellesley College. She received her MPP in public policy from the Goldman School of Public Policy at UC Berkeley, and her PhD in economics also from UC Berkeley. Prior to joining Harvard, Dr. Maestas was a senior economist at RAND, where she served as director of the Economics, Sociology and Statistics Research Department, director of the Center for Disability Research, director of the NIA (T32) Postdoctoral Training Program in the Study of Aging, and director of the NIA-sponsored RAND Summer Institute’s Mini-Medical School for Social Scientists.

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Irwin S. Kirsch is the Director of the Center for Global Assessment at Educational Testing Service. He earned his Ph.D. in Educational Measurement, Reading/Literacy from the University of Delaware in 1982. Since joining ETS in 1984, he has directed a number of large-scale assessments in the area of literacy including the National Adult Literacy Survey, and the NAEP Young Adult Literacy Survey. He was also a key person in establishing the International Adult Literacy Surveys and has directed them for ETS since 1993. In 1987, he received the ETS Research Scientist Award for his work in the area of literacy and was named as an ETS Distinguished Presidential Appointee in 1999. Kirsch currently manages several large-scale surveys including the Adult Education Program Study with the U.S. Department of Education and the Literacy Assessment and Monitoring Program with the UNESCO Institute for Statistics. Kirsch also chairs the Reading Expert Group for the Organisation for Economic Co-operation and Development (OECD), Programme for International Student Assessment (PISA) and has been involved with several efforts aimed at defining and measuring information and communication technology (ICT) skills. In this area, he has directed an international panel for ETS that defined ICT literacy, has designed and conducted a feasibility study on ICT literacy for the OECD, and participates on an OECD advisory panel aimed at establishing a new survey of adult skills for the 21st century.