Certificate of Need laws require many types of health care providers to obtain the permission of a state board before they are allowed to open or expand in many US states. But there is a lot of variation from state to state in which types of providers are covered by these laws. I put together this map to show the 15 states that require new home health care agencies to obtain a Certificate of Need:
CON states see reduced competition, which tends to be bad news for patients and new entrants, but good for existing providers and the private equity firms consideringbuying them.
But some CON states like Rhode Island have proposed reforms that would exempt home health agencies from the CON process, putting them in line with the majority of states that put new entrants on an even footing with incumbent providers.
I never thought of myself as a businessman- until 2015 when the IRS told me I was, and that I therefore needed to pay them more money to cover the self-employment tax. Naturally I was confused and angry about this at first, but in the long run it turns out they were doing me a favor.
If you make a tiny amount of 1099-MISC or 1099-NEC income on occasion, the IRS is probably* fine with characterizing this as ordinary income from a hobby. But if you earn 1099 income at all regularly, they will likely want to characterize you as a business, and want you to pay a self-employment tax similar to the payroll tax that W2 employees pay (though it will look higher to you, since you will pay both the employee and employer halves of the tax). If you make an intermediate amount of 1099 income, you might have the choice of whether to call this hobby income or business income; I had thought it would be better to avoid the complications and extra taxes of being a business, but it turns out that being a business unlocks new opportunities for deductions than can far outweigh the self-employment tax.
For example, a home office, business-related travel expenses, and advertising expenses can be deductible. For a writer, this could cover conferences, website expenses, computers, and much more. It also means you can start a SEP IRA– in addition to a personal IRA if you like. This alone could allow you to deduct thousands of dollars in income per year (technically up to $69k if you make at least $276,000 per year in business income, though if you make that much, you’re the one who should be giving me advice). The SEP IRA has the advantage over a personal IRA of a much higher income limit and, potentially a higher contribution limit, though again the beauty is that you don’t have to choose- you can just do both.
While this post is mainly about business, I also think regular IRAs might still be underrated. I didn’t start one until 2022, but I should have done it much earlier. First I thought I was too poor (low income, then higher income but with student loans to pay off first), then I thought I was too rich (above the income limits). It turns out though that you can still start a personal IRA even when you are above the income limits- it just means you only get one tax benefit instead of two, but that one tax benefit is still pretty good.
Every IRA has the benefit of investments growing tax-free; if you meet the income limits then IRAs get the additional benefit of avoiding income taxes either when you put the money in (for traditional) or when you pull it out (for Roth). But even if you “only” get the benefit of tax free growth, that can still be a huge monetary benefit depending on your investment strategy. It is also a big time benefit- every taxable brokerage account means at least one** extra tax form to deal with every year, while an IRA account avoids this.
Another great benefit to IRAs (SEP or regular) is that you can still start one now and make contributions for the 2024 tax year. I was just doing my taxes and kicking myself for not doing some things differently back in 2024 when it would have helped; but IRAs are like a form of time travel where you can still go back and fix things, at least until April 15th.
*Disclaimer- Not official tax advice, I’m not an accountant, I’m just a 37 year old guy with lifetime 1-1-1 record against the IRS. Three times they have told me I owed them more than I paid on a tax return. Once I won (I told them I owed nothing and explained why, and they agreed). Once I lost (I told them oh shit, you’re right and paid them). For the story I started this post with, I call it a draw (they told me I owed them X, I told them I owed nothing and explained why, then they told me I actually owed them 1/3X and I just paid it).
**More than one if like me you accidentally invest in a partnership and as a resultget a K-1 on top of the usual 1099-DIV for that overall brokerage account
I’ve now posted individual-level responses to the 1978-2025 Michigan Consumer Surveys to Kaggle in CSV and Stata formats. The University of Michigan’s Consumer Surveys are a widely followed source for data on consumer confidence and inflation expectations:
Their official site is good if you just want summary tables or charts like this:
But what if you want detailed crosstabs to see how sentiment differs for different groups, or microdata so that you can run regressions? With enough clicks you can get this from what UMich calls their “cross-section archive“. But it is pretty hidden, my student looking into this thought they just didn’t offer individual-level data; and even once you get their data, it is in an unlabelled CSV file with hard-to-understand variable names and codes. So I wanted to make it clear that the full data with all responses for all years is available, and if you use my Stata version it is even reasonably easy to understand (the code I adapted for labelling it is on OSF). Then you can run your regressions, or make charts like this:
The College-Only Covid Recovery
If you’re new here, a reminder that you can find other cleaned-up versions of popular datasets on my data page.
America has withdrawn aid from Ukraine. Contra the Vice-President, we could easily afford to reverse this, and I hope we will. I know we could afford it because even the much poorer Europeans can, and I think they might finally be ready to try.
Until now, Europe has been fighting with both hands tied behind their back- letting their economic growth fall far behind America’s due to poor policy, and committing only a tiny share of that economy to defense. Here’s how Polish Prime Minister Donald Tusk put it:
Europe may be significantly poorer than the US on a per-capita basis, but it has significantly more people, so the total size of their economy is almost as large as the US and over 4 times larger than Russia:
But Europe has put only a small fraction of their economy toward defense for a long time. Russia alone spends more on their military than the rest of Europe combined despite their much smaller economy, by putting a much larger fraction of their GDP toward the military:
When European countries spend so little on their own defense, they have little to share with Ukraine. Many leaders complaining about the end of US support have contributed much less themselves, even as a share of their smaller economies:
Europe can be much stronger than Russia, but only if they start trying at least half as hard as Russia. Yes, Europe has poor demographics, but Russia’s are worse; Europe has many more military-age men:
Yes, Russia has nukes, but so do Britain and France, and France might actually take advantage of this.
Economically speaking, is this a good time for Europe to rearm? To me it looks fine. The best time would have been the late 2000s to early 2010s, both because it could have been in time to dissuade Russia from starting this war, and because their economic problems then were much more about a lack of aggregate demand. But right now inflation is fine at 2.4%, NGDP growth is fine at 4.3%, and 10-year bond yields the major countries are around 3-4%. Overall this looks like AD is currently about right, but markets expected that economic growth could turn negative this year, and a burst of defense spending could head that off:
This would be especially valuable if it can be paired with the supply-side reforms that European leaders know they should to do anyway, and that would allow for more growth without pushing up inflation. Europe has fallen far behind the US in productivity, to the point that it is now a bigger issue than their higher unemployment and lower hours worked in explaining why the US is much richer:
The silver lining here is that the further behind the US they fall, the faster they could potentially grow- catchup growth is easier than frontier growth, you just need to copy the technologies and implement the strategies already figured out by the frontier economies. Europe easily has the human capital to do this, they just haven’t had the will- have preferred to regulate new technologies like fracking and AI into oblivion, along with older technologies like nuclear power. They won’t drill for oil and gas themselves in the name of decarbonization but have spent hundreds of billions on Russian oil and gas just since the war began. But if they ever decided to change their policy, their economy could rapidly improve- like letting go of the rubber band you’ve been pulling back.
European leaders appear to finally be realizing this. The European Commission just proposed a 150 billion Euro joint defense fund. This week Germany proposed spending half a trillion on infrastructure and defense, sending European stocks above their previous all-time high set in the year 2000 (!).
The EU always used to be able to excuse their economic failings by saying “at least we brought peace to a continent formerly full of war.” But this is no longer the case. If they cannot settle the war on good terms, they have no excuse. The good news is that European decline has been a choice, and it is a choice they could decide to change at any moment. Victory awaits those who will it.
Whenever researchers are conducting studies using state- or county-level data, we usually want some standard demographic variables to serve as controls; things like the total population, average age, and gender and race breakdowns. If the dataset for our main variables of interest doesn’t already have this, we go looking for a new dataset of demographic controls to merge in; but it has always been surprisingly hard to find a clean, easy-to-use dataset for this. For states, I’ve found the University of Kentucky’s National Welfare Database to be the best bet. But what about counties?
I had no good answer, and the best suggestion I got from others was the CDC SEER data. As so often, the government collected this impressively comprehensive dataset, but only releases it in an unusable format- in this case only as txt files that look like this:
I cleaned and reformatted the CDC SEER data into a neat panel of county demographics that look like this:
I posted my code and data files (CSV, XLSX, and DTA) on OSF and my data page as usual. I also posted the data files on Kaggle, which seems to be more user-friendly and turns up better on searches; I welcome suggestions for any other data repositories or file formats you would like to see me post.
The average hospital is now 3/4 full- more full than during much of the worst of the Covid pandemic, and well above the 2/3 occupancy rate that prevailed during the 2010s. This is according to a study out yesterday in JAMA Open:
This seems to be due to a reduction in bed supply, rather than an increase in demand:
The number of staffed hospital beds declined from a prepandemic steady state of 802 000 (2009-2019 mean) to a post-PHE steady state of 674 000, whereas the mean daily census steady state remained at approximately 510 000
To me this is one more reason to reform Certificate of Need laws that put barriers in the way of hospitals opening or adding beds. Luckily I see a lot of momentum for CON reform this legislative season, including the highest-occupancy state, Rhode Island:
The NSCH is the latest casualty of the new administration taking down major datasets from government websites. Between Archive.org and what I had downloaded for old projects, I was able to get all the 2016-2023 topical NSCH files and post them on an Open Science Foundation page.
I took this as a chance to improve the data- the government previously only made the topical Public Use Files available in SAS and Stata formats one year at a time, so I added a merged version for all available years in both Stata and Excel formats.
I hope and expect that the National Survey Children’s Health will be back up at official websites soon. But I expect that other datasets will be taken down permanently, so now is the time to download what you think you might need and add it to your data hoard– especially if you want anything from the Department of Education.
Several major datasets produced by the federal government went offline this week. Some, like the Behavioral Risk Factor Surveillance Survey and the American Community Survey, are now back online; probably most others will soon join them. But some datasets that the current administration considers too DEI-inflected could stay down indefinitely.
This serves as a reminder of the value of redundancy- keeping datasets on multiple sites as well as in local storage. Because you never really know when one site will go down- whether due to ideological changes, mistakes, natural disasters, or key personnelmoving on.
If you are currently looking for a federal dataset that got taken down, some good places to check are IPUMS, NBER, Archive.org, or my data page. PolicyMap has posted some of the federal datasets that seem particularly likely to stay down; if you know of other pages hosting federal datasets that have been taken down, please share them in the comments.
Do I really think that the things I write about here and in my papers are the most important things in the world? No. Like most academics, I tend to emphasize the issues where I think I bring a unique perspective, rather than most important issues. But if you don’t realize this, you might get the impression that I think the things I normally talk about are the most important, rather than simply the most neglected and tractable / publishable. I don’t work on the most important issues because I see no good way for me to attack them- but if you do see a way, that is where you should focus. So what are the big issues of the 2020’s?
I see two issues that stand out above the many other important events of the day:
Artificial Intelligence: At minimum, the most important new technology in a generation; has the potential to bring about either utopia or dystopia. Do you have ideas for how to nudge it one way or another?
Rise of China: From extreme poverty to the world’s manufacturing powerhouse in two generations. What lessons should other countries learn from this for their own economic policy? How can we head off a world war and/or Chinese hegemony?
Focusing a bit more on economics, I see two perennial issues where there could be new opportunities to solve vital old questions:
Economic Development: We still don’t have a definitive answer to Adam Smith’s founding question of economics- why are some countries rich while other countries are poor, and how can the poor countries become rich? I think economic freedom is still an underrated answer, but even if you agree, the question remains of how to advance freedom in the face of entrenched interests who benefit from the status quo.
Robust Prediction: How can we make economics into something resembling a real science, one where predictions that include decimal places don’t deserve to be laughed at? Can you find a way to determine how much external validity an experiment has? Or how to use machine learning to get at causality? Or at least push existing empirical research to be more replicable?
I’ve added these points to my ideas page, since all this was inspired by me talking through the ideas on the page with my students and realizing how small and narrow they all seemed. Yes, small and narrow ideas are currently easier to publish in economics, but there is more to research and life than easy publications.
WSJ’s survey of economists reports that inflation expectations for 2025 were around 2% before the election, but are closer to 3% now. Their economists expect GDP growth slowing to 2%, unemployment ticking up slightly but staying in the low 4% range, with no recession. The basic message that 2025 will be a typical year for the US macroeconomy, but with inflation being slightly elevated, perhaps due to tariffs.
Kalshi has a lot of good markets up that give more detailed predictions for 2025:
For those who hope for DOGE to eliminate trillions in waste, or those who fear brutal austerity, the message from markets is that the huge deficits will continue, with the federal debt likely climbing to over $38 trillion by the end of the year. This is one reason markets see a 40% chance that the US credit rating gets downgraded this year.
While the US has only a 22% chance of a recession, China is currently at 48%, Britain at 80%, and Germany at 91%. The Fed probably cuts rates twice to around 4.0%.
Will wage growth keep pace with inflation? It’s a tossup. Corporate tax cuts are also a tossup. The top individual rate probably won’t fall below it’s current 37%.
If you want to make your own predictions for the year, but don’t want to risk money betting on Kalshi, there are several forecasting contests open that offer prizes with no risk:
ACX Forecasting Contest: $10,000 prize pool, 36 questions, must submit predictions by Jan 31st
Bridgewater Forecasting Contest: $25,000 prize pool, half of prizes are reserved for undergraduates. Register now to make predictions between Feb 3rd and March 31st. Doing well could get you a job interview at Bridgewater.
Economist Writing Every Day 