The Impact of Paid Sick Leave Laws on Consumer and Business Bankruptcies in Journal of Empirical Legal Studies

Miller, M.M. (2022). The impact of paid sick leave laws on consumer and business bankruptcies. Journal of Empirical Legal Studies

This paper examines how missed income due to illness impacts household fragility. Specifically, it shows that paid sick leave laws, which provide households insurance against illness-related income shocks, reduce consumer bankruptcy. Using a panel dataset at the county-quarter level, this paper exploits the geographic and temporal variation in the adoption of paid sick leave laws to implement a difference-in-differences and event study analysis. It finds that paid sick leave laws reduce consumer bankruptcy filings by approximately 11%; this effect is seen within three quarters of the law’s implementation and remains constant in magnitude and significance thereafter. As paid sick leave laws may come at a cost to businesses, this paper also examines the impact of such laws on business bankruptcy filings—it shows that paid sick leave laws have little to no impact on business bankruptcy filings.

Bankruptcy Courts Ill-Prepared for Tsunami of People Going Broke From Coronavirus Shutdown (with Paige Skiiba, Dalié Jiménez, Pamela Foohey, and Sarah Sternberg Greene) in The Conversation

Skiiba, P.M. Jiménez, D., Miller, M.M., Foohey, P., Greene, S.S. (2020). Bankruptcy courts ill-prepared for tsunami of people going broke from coronavirus shutdown. The Conversation

As more Americans lose all or part of their incomes and struggle with mounting debts, another crisis looms: a wave of personal bankruptcies. Bankruptcy can discharge or erase many types of debts and stop foreclosures, repossessions and wage garnishments. But our research shows the bankruptcy system is difficult to navigate even in normal times, particularly for minorities, the elderly and those in rural areas.

Women’s Access to Credit Increases Women in Bankruptcy: Evidence from Maryland Since 1940 (with Mary Eschelbach Hansen) in Essays in Economic and Business History

Hansen, M.E., and Miller, M.M. (2020). Women’s access to credit increases women in bankruptcy: Evidence from Maryland since 1940. Essays in Economic and Business History, 38: 1-37.

Little is known about women’s use of consumer bankruptcy in the US before 1980. We use new data from Maryland to show that women who petitioned for bankruptcy without a spouse were twice as common in the 1970s as they were in the 1950s and 1960s. We explore the extent to which the growing supply of credit to women explains their growing representation in bankruptcy. To do this, we examine the effect of a 1974 federal law that barred sex discrimination in lending, increasing the supply of credit to women relative to men. After the law, the probability that a bankrupt was a woman was 30 percentage points higher. Additionally, while the number of creditors reported by women filers grew to match men’s, the amount of debt female filers owed did not grow relative to male filers. Together these results imply that the law increased the supply of credit to women on the extensive margin, that is, it increased the number of women who received credit. The patterns suggest that earlier low rates of bankruptcy among women were largely a result of the low supply of credit to them.

Does Money Matter for Intergenerational Income Transmission? (with Frank McIntyre) in Southern Economic Journal

Miller, M.M., and McIntyre, F. (2020). Does money matter for intergenerational income transmission?” Southern Economic Journal 86(3): 941-970.

The intergenerational income elasticity is a crucial measure of income mobility. In this paper we develop a structural model to examine the channels through which this elasticity operates. Using data from the Panel Study of Income Dynamics, we separately identify the human capital and the financial components. The human capital component examines the transmission of human capital, independent of financial investments while the financial component examines the impact of income that is uncorrelated with human capital, that is, exogenous income. Using a two-stage framework, we show that the intergenerational income elasticity operates through both channels. Moreover, our estimates show that the financial component may have a larger effect than previously estimated, plausibly attributing to 36 percent of intergenerational income transmission. Indeed, this result holds even when the financial component is defined in an incredibly narrow manner. This suggests that cash payments could promote intergenerational mobility.

Who Files for Bankruptcy?  The Heterogeneous Impact of State Laws on a Household’s Bankruptcy Decision in American Law and Economics Review

Miller, M.M. (2019). Who files for bankruptcy? The heterogeneous impact of state laws on a household’s bankruptcy decision. American Law and Economics Review, 21(2): 247-279.

This paper examines the heterogeneous impact of state exemption laws and state garnishment laws on bankruptcy. Using a new household level dataset, my empirical specification simultaneously examines the impact these laws have on a household’s bankruptcy decision as well as a household’s assets and unsecured debts. I find that high exemption laws have a positive impact on bankruptcy and that this effect is increasing in assets. Additionally, I find that high garnishment rates have a positive impact on bankruptcy, which is increasing in income. Moreover, I examine the policy implications of standardizing state exemption laws and state garnishments laws. Understanding the heterogeneous effects of these laws is crucial as they suggest that a household with a given set of financial characteristics will seek bankruptcy relief if it resides in one state but will have to use alternative consumption smoothing measures if it lives in a different state.

A New View of Women in Bankruptcy: Evidence from Maryland Since 1940 (with Mary Eschelbach Hansen) in American Bankruptcy Institute Journal

Hansen, M.E., and Miller, M.M. (November 2016). A new view of women in bankruptcy: Evidence from Maryland since 1940. American Bankruptcy Institute Journal

Women filing for bankruptcy alone—that is, without a spouse identified as a co-debtor—increased from about 20 percent of all petitioners in 1980 to almost 40 percent in 2000. This article examines the historical origins of the increase. We collected data from cases filed in Maryland between 1940 and 2003 to construct the first consistent time series of women in bankruptcy. We find that the share of women in bankruptcy was volatile at midcentury, and its modern, steady increase dates to the 1960s. Our data shows that the rise is, to a large extent, associated with improvements in access to credit for women, which were accelerated by the Equal Credit Opportunity Act (ECOA) of 1974.

Provider Payment Methods and Incentives (with Randall P. Ellis and Bruno Martins) in International Encyclopedia of Public Health, 2nd edition

Ellis, R.P., Martins, B., and Miller, M.M. (2016). Provider payment methods and incentives” in Heggenhougen, H.K., and Quah, S. (eds.), International Encyclopedia of Public Health, Second edition.

Diverse provider payment systems create incentives that affect the quantity and quality of health care services provided. Payments can be based on provider characteristics, which tend to minimize incentives for quality and quantity. Or payments can be based on quantities of services provided and patient characteristics, which provide stronger incentives for quality and quantity. Payments methods using both broader bundles of services and larger numbers of payment categories are growing in prevalence.  The recent innovation of performance-based payment attempts to target payments on key patient attributes so as to improve incentives, better manage patients, and control costs.

Social Networks and Personal Bankruptcy in Journal of Empirical Legal Studies

Miller, Michelle M. (2015). Social networks and personal bankruptcy. Journal of Empirical Legal Studies, 12(2): 289-310.

This article examines the role of social networks in a household’s bankruptcy decision. Social networks may affect a household’s bankruptcy decision in many ways: they could provide information about the required paperwork, recommend an attorney, reduce the stigma associated with bankruptcy, or increase awareness of its benefits. Using data from the Panel Study of Income Dynamics (PSID), I exploit county and racial variation to identify network effects. My empirical strategy asks whether being surrounded by others of the same race increases bankruptcy use more for those in racial groups with high filing rates. This methodology allows me to include both county-year and racial-group fixed effects in my regressions. The results strongly confirm the importance of networks in a household’s bankruptcy decision.

Chapter 7 or 13: Are Client or Lawyer Interests Paramount? (with Lars J. Lefgren and Frank McIntyre) in B.E. Journal of Economics Analysis and Policy (Advances)

Lefgren, L.J., McIntyre, F., and Miller, M.M. (2010). Chapter 7 or 13: Are client or lawyer interests paramount?” The B.E. Journal of Economic Analysis and Policy (Advances), 10(1): Article 82.

Households often rely on professionals with specialized knowledge to make important financial decisions. In many cases, the professional’s financial interests are at odds with those of the client. We explore this problem in the context of personal bankruptcy. Both OLS and IV estimates show that attorneys play a central role in determining whether households file under Chapter 7 or Chapter 13 of the bankruptcy code. We present evidence suggesting that some attorneys maximize profits by steering households into Chapter 13 bankruptcy even when the households’ objective financial benefits are low and the probability of case dismissal is high. An attorney-induced Chapter 13 filing increases household legal fees and reduces the probability of long-term debt relief.

Repeat Filers under the BAPCPA: A Legal and Economic Analysis (with Lance Miller) in Norton Annual Survey of Bankruptcy Law

Miller, L.E., and Miller, M.M. (2008). Repeat filers under the BAPCPA: A legal and economic analysis.  In Norton, W.L. (ed.) Norton Annual Survey of Bankruptcy Law, 509-534.

On April 20, 2005, President Bush signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (the “BAPCPA”). In this paper we highlight the three provisions of the BAPCPA which targeted repeat filers. First, Section 362(c) was amended to limit the automatic stay for repeat cases filed within a year of earlier dismissed cases. In addition, the BAPCPA amended Section 707(a)(8) to increase the time debtors must wait in between discharges, and added Section 109(h) to require that all individual debtors must obtain credit counseling before filing for bankruptcy. We discuss these changes from a legal and historical perspective, and examine whether and how each change impacted repeat filings. We find that while the BAPCPA did increase the time between filings, it did not change the rate of repeat filings. Moreover, the financial description of repeat filers remained the same before and after the BAPCPA. The BAPCPA may have prolonged the inevitable, but it did not lower the rate of repeat filing or effect who repeatedly files for bankruptcy.

Provider Payment Methods and Incentives In International Encyclopedia of Public Health (with Randall P. Ellis)
Ellis, R.P. and Miller, M.M. (2008). Provider payment methods and incentives. In Heggenhougen, K.(ed.) International Encyclopedia of Public Health, 395-402

Reprinted: Ellis, R.P. and Miller, M.M. (2009). Provider payment methods and incentives. In Carrin, G., Buse, K., Heggenhougen, H.K., and Quah, S.R. (eds.) Health systems policy, finance, and organization, 322-329.

Diverse provider payment systems create incentives that affect the quantity and quality of health care services provided. Payments can be based on provider characteristics, which tend to minimize incentives for quality and quantity. Or payments can be based on quantities of services provided and patient characteristics, which provide stronger incentives for quality and quantity. Payments methods using both broader bundles of services and larger numbers of payment categories are growing in prevalence. The recent innovation of performance-based payment attempts to target payments on key patient attributes so as to improve incentives, better manage patients, and control costs.