Investigations into the existence and impact of defensive medicine in obstetrics have produced mixed and often conflicting implications. The most widely-cited and accepted results in this literature find that less severe malpractice environments cause an increase in the use of cesarean section. This has been interpreted as "offensive medicine"; taking advantage of lenient malpractice environments by providing unnecessary services in order to raise revenue. In this article we show that an assumption concerning births with an unknown method of delivery, which is not explicitly stated in the literature, is pivotal in obtaining these results. Using data on tort reforms and birth outcomes from 1989 to 2001 in 24 US states, we show that for the 98.4% of births with a confirmed method of delivery, the estimated effects of tort reform on C-section rates are insignificant. Therefore, without this assumption, there is little evidence to support an interpretation of offensive medicine.
We also thank Jeffrey Lingwall and Mel Stephens for providing us with measures of school quality for an extended history. Lochner thanks the Social Sciences and Humanities Research Council of Canada for financial support. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.
This paper empirically examines the relationship between the self-identity as Indigenous and earnings inequality in the Mexican labor market. Using Mexican Census data and a large set of wage covariates reveals the existence of an earnings penalty for self-identification as Indigenous. There is an additional and larger penalty for Indigenous persons who are fluent in an Indigenous language, regardless of Spanish language fluency. Further analyses using the Mexican Family Life Survey reveal that these earnings gaps persist after we also control for an individual's cognitive ability. Ethno-linguistic inequality is particularly strong in smaller cities and among self-employed workers. JEL Classification: J10, J15, J31, J71, O15
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