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Most literature examining firms’ make and buy decisions fails to explore when firms use both governance structures for similar transactions. We examine this phenomenon in the trucking industry, where it is common for a carrier to use both employee drivers and outsourcing at the same time. We argue that efficiency, appropriability and competition concerns lead carriers to organize on a haul-by-haul basis.We empirically examine our theory using a unique data from a small trucking firm in St Louis, MO, and find broad support for our hypotheses.We also discuss the possibility of alternative explanations of market power, capacity constraint, agency theory and property right theory for the use of make and buy. We conclude that these theories do not explain this phenomenon in the trucking industry. Thus, we conclude that it is the interaction of efficiency, appropriability and competition concerns that drive the decision to make and buy in the trucking industry.We further postulate that these concerns can manifest themselves in other industries, suggesting that our theory has applicability beyond trucking.

This paper studies the impact of the tax incentive prescribed in the Health Insurance Portability and Accountability Act of 1996 (HIPAA) on individuals' long-term care insurance purchasing behavior. Using data from the Health and Retirement Study, we find that the tax incentive in HIPAA increased the take-up rate of private LTC insurance by 3.3 percentage points, or 25%, for those eligible. Despite this seemingly strong response, our results imply that even an above-the-line tax deduction would not increase the coverage rate of seniors beyond 13%, indicating that tax incentives alone are unlikely to expand the market substantially. We also present, to our knowledge, the first estimate of the price elasticity of demand for LTC insurance of around − 3.9, suggesting that demand is highly elastic at the current low ownership rate. Finally, we evaluate the net fiscal impact of the tax incentive and find that the tax deductibility of LTC insurance premiums leads to a net revenue loss for the government, as the reduced tax revenue from granting the tax incentive exceeds the savings in Medicaid's LTC expenditures.

Using the Survey of Income and Program Participation, we examine the impact of formal employment on informal caregiving. We instrument for individual work hours with state unemployment rates. We find that, among women of prime caregiving ages (40-64 years), working 10% more hours per week reduces the probability of providing informal care by about 2 percentage points. The effects are stronger for more time-intensive caregiving and if care recipients are household members. Our results imply that work-promoting policies have the unintended consequence of reducing informal caregiving in an aging society. Copyright © 2015 John Wiley & Sons, Ltd.