No. We should exempt workers earning the lowest wages.

Social Security faces a serious funding problem. The program takes in too little money to pay all that has been promised to future beneficiaries. Government forecasters predict Social Security’s reserve fund will be depleted between 2030 and 2034. There are two basic ways we can eliminate the funding gap: cut benefits or increase contributions. A common proposal is to increase the age at which workers can claim full retirement benefits. For people nearing retirement today, the full retirement age is 66. As a result of a 1983 law, that age will rise to 67 for workers born after 1959.

When policymakers urge us to raise the retirement age, they are proposing to increase the full retirement age beyond 67, possibly to 70, for workers now in their 30s or 40s. This saves money, but it also cuts monthly retirement benefits by the same percentage for every worker, unless workers delay claiming benefits. The policy might seem fair if workers in future generations could all expect to share in gains in life expectancy. However, new research shows that gains in life expectancy have been very unequal, with the biggest improvements among workers who earn top incomes. Life expectancy gains for workers with the lowest incomes have been small or negligible.

If the full retirement age were raised, future retirees with high lifetime earnings can expect to receive some compensation when their monthly benefits are cut. Because they can expect to live longer than today’s retirees, they will receive benefits for a longer span of years after 65. For low-wage workers, there is no compensation. Since they are not living longer, their lifetime benefits will fall by the same proportion as their monthly benefits. Thus, “raising the retirement age” is a policy that cuts the lifetime benefits of future low-wage workers by a bigger percentage than it does of future high-wage workers.

The fact that low-wage workers have seen small or negligible gains in life expectancy signals that their health when they are past 60 is no better than that of low-wage workers born 20 or 30 years ago. This suggests their capacity to work past 60 is no better than it was for past generations. A sensible policy for cutting future benefits should therefore preserve current benefit levels for workers who have contributed to Social Security for many years but have earned low wages.

Editor's note: This piece originally appeared in CQ Researcher.

As the nation still struggles with high healthcare costs that consume larger and larger portions of patient budgets as well as government coffers, the search for ways to get costs under control continues. Total healthcare spending in the U.S. now represents almost 18 percent of our entire economy. One promising cost-savings approach is called “reference pricing,” where the insurer establishes a price ceiling on selected services (joint replacement, colonoscopy, lab tests, etc.). Often, this price cap is based on the average of the negotiated prices for providers in its network, and anything above the reference price has to be covered by the insured consumer.

A study published in JAMA Internal Medicine by James Robinson and colleagues analyzed grocery store Safeway’s experience with reference pricing for laboratory services such as such as a lipid panel, comprehensive metabolic panel or prostate-specific antigen test. Safeway’s non-union employees were given information on prices at all laboratories through a mobile digital platform and told what Safeway would cover. Patients who chose a lab charging above the payment limit were required to pay the full difference themselves.

Employers see this type of program as a way to incentivize employees to think through the price of services when making healthcare decisions. Employees enjoy savings when they switch to a provider whose negotiated price is below the reference price, whereas if they choose services above it, they are responsible for the additional cost.

Robinson’s results show substantial savings to both Safeway and to its covered employees from reference pricing. Compared to trends in prices paid by insurance enrollees not subject to the caps of reference pricing, costs paid per test went down almost 32 percent, with a total savings over three years of $2.57 million – patients saved $1.05 million in out-of-pocket costs and Safeway saved $1.7 million.

I wrote an accompanying editorial in JAMA Internal Medicine focusing on different types of consumer-driven approaches to obtain lower prices; I argue that approaches that make the job simpler for consumers are likely to be even more successful. There is some work involved for patients to make reference pricing work, and many may have little awareness of price differences across laboratories, especially differences between those in some physicians’ offices, which tend to be more expensive but also more convenient, and in large commercial laboratories. Safeway helped steer their employees with accessible information: they provided employees with a smartphone app to compare lab prices.

But high-deductible plans like Safeway’s that provide extensive price information to consumers often have only limited impact because of the complexity of shopping for each service involved in a course of treatment -- something close to impossible for inpatient care. In addition, high deductibles are typically met for most hospitalizations (which tend to be the very expensive), so those consumers are less incentivized to comparison shop.

Plans that have limited provider networks relieve the consumer of much complexity and steer them towards providers with lower costs. Rather than review extensive price information, the consumer can focus on whether the provider is in the network. Reference pricing is another approach that simplifies—is the price less than the reference price? What was striking about Robinson’s results is that reference pricing for laboratories was employed in a high-deductible plan, showing that the savings achieved—in excess of 30 percent compared to a control—were beyond what the high deductible had accomplished.

While promising, reference pricing cannot be applied to all medical services: it works best for standardized services and where variation in quality is less of a concern. It also can be applied only to services that are “shoppable,” which is only about one-third of privately-insured spending. Even if reference pricing expanded to a number of other medical services, other cost containment approaches, including other network strategies, are needed to successfully contain health spending and lower costs for non-shoppable medical services.

Editor's note: This piece originally appeared in JAMA.

In the early hours of Sunday June 12, 2016, a madman perpetrated the mass murder of 49 people in a nightclub considered a safe space for Orlando’s LGBT community. 

Politicians quickly went into gear to exploit this tragedy to push their own agendas. Glaringly silent on the civil rights of LGBT communities, Donald Trump and Ted Cruz repeated their calls to ban, deport, and more aggressively prosecute Muslims in the wake of this attack. As if Muslims in America are not already selectively targeted in counterterrorism enforcement, stopped for extra security by the TSA at airports, and targeted for entrapment in terrorism cases manufactured by the FBI. 

Other politicians reiterated calls for Muslim communities to fight extremism purportedly infecting their communities, all while ignoring the fact that domestic terrorism carried out by non-Muslim perpetrators since 9/11 has had a higher impact than the jihadist threat. Asking Muslim American communities to counter violent extremism is a red herring and a nonstarter. 

In 2011, the White House initiated a countering violent extremism (CVE) program as a new form of soft counterterrorism. Under the rubric of community partnerships, Muslim communities are invited to work with law enforcement to prevent Muslims from joining foreign terrorist groups such as ISIS. Federal grants and rubbing elbows with high level federal officials are among the fringe benefits for cooperation, or cooptation as some critics argue, with the CVE program. 

Putting aside the un-American imposition of collective responsibility on Muslims, it is a red herring to call on Muslims to counter violent extremism. An individual cannot prevent a criminal act about which s/he has no knowledge. Past cases show that Muslim leaders, or the perpetrators’ family members for that matter, do not have knowledge of planned terrorist acts. 

Hence, Muslims and non-Muslims alike are in the same state of uncertainty and insecurity about the circumstances surrounding the next terrorist act on American soil. 

CVE is also a nonstarter for a community under siege by the government and private acts of discrimination. CVE programs expect community leaders and parents to engage young people on timely religious, political, and social matters. While this is generally a good practice for all communities, it should not be conducted through a security paradigm. Nor can it occur without a safe space for honest dialogue.

After fifteen years of aggressive surveillance and investigations, there are few safe spaces left in Muslim communities. Thanks in large part to mass FBI surveillance, mosques have become intellectual deserts where no one dares engage in discussions on sensitive political or religious topics. Fears that informants and undercover agents may secretly report on anyone who even criticizes American foreign policy have stripped mosques from their role as a community center where ideas can be freely debated. Government deportations of imams with critical views have turned Friday sermons into sterile monologues about mundane topics. And government efforts to promote “moderate” Muslims impose an assimilationist, anti-intellectual, and tokenized Muslim identity. 

For these reasons, debates about religion, politics, and society among young people are taking place online outside the purview of mosques, imams, and parents. 

Meanwhile, Muslim youth are reminded in their daily lives that they are suspect and their religion is violent. Students are subjected to bullying at school. Mosques are vandalized in conjunction with racist messages.  Workers face harassment at work. Muslim women wearing headscarves are assaulted in public spaces. Whether fear or bigotry drives the prejudice, government action and politicians’ rhetoric legitimize discrimination as an act of patriotism.

Defending against these civil rights assaults is consuming Muslim Americans’ community resources and attention. Worried about their physical safety, their means of livelihood, and the well-being of their children in schools; many Muslim Americans experience the post-9/11 era as doubly victimized by terrorism. Their civil rights are violated by private actors and their civil liberties are violated by government actors—all in retribution for a criminal act about which they had no prior knowledge, and which they had no power to prevent by a criminal with whom they had no relationship.

To be sure, we should not sit back and allow another mass shooting to occur without a national conversation about the causes of such violence. But wasting time debating ineffective and racialized CVE programs is not constructive. Our efforts are better spent addressing gun violence, the rise of homophobic violence, and failed American foreign policy in the Middle East.

We all have a responsibility to do what we can to prevent more madmen from engaging in senseless violence that violates our safe spaces.

This article was originally published in the Huffington Post.

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Hillary Clinton isn’t often in the business of offering unsolicited advice to her Republican—or even Democratic—rivals in the presidential race. However, in a CNN interview with Alisyn Camerota on January 12, 2015, Hillary Clinton did just that. She did something quite taboo. She talked about the presidential transition.

Her comments did not flow from confidence that she would be elected president—a confidence she may indeed have. Her words came from experience, pragmatism and reality. They were words that did not simply reflect her own approach to a candidacy or a prospective administration. It was advice to everyone running for president about the right thing to do—not for themselves, but for the American public.

Clinton said:

I want to think hard—if I do get the nomination, right then and there—how we organize the White House, how we organize the Cabinet, what’s the legislative agenda. You know, the time between an election and an inauguration is short. You can’t wait. I mean, you can’t take anything for granted; you need to keep working as hard as you possibly can. But I think it’s important to start planning because we know what happens if you get behind in getting your agenda out, in getting your appointments made. You lose time, and you’re not doing the work the American people elected you to do.

Presidential candidates almost never speak of a transition until they are declared the president-elect in the late hours of the Tuesday following the first Monday in November. Candidates fear being accused of taking the election for granted, or “measuring the drapes.” They worry such planning will signal to voters an off-putting overconfidence.

Those fears may be legitimate, but acting on those concerns can be dangerous. If a voter believes a candidate should not prepare for a new administration until they are officially elected, that leaves the president-elect about 11 weeks to ready themselves for the busiest, most complicated, most important job in the world. In those 11 weeks, a president-elect would need to think not just about the 15 Cabinet secretaries who serve as the most visible political appointees in government, but literally hundreds and thousands of other posts. (One dirty little secret is that the President of the United States appoints over 3,000 people to his or her administration.)

Presidents have to think about the structure, order, and sequence of their legislative agenda. They need to communicate their intentions and plans to congressional leadership. They need to think about organizing a White House. The truth is from president to president, the White House looks the same from the outside, but is structured and functions dramatically differently on the inside. Presidents have myriad important decisions to make that will set the tone and agenda for the following four years and will affect every American in some way. Eleven weeks is not enough time. Clinton acknowledges this.

Clinton’s “bold” statement actually reflects a reality in American politics. As soon as an individual accepts his or her party’s presidential nomination, they are entitled to funding, office space, and government email and technology as part of the transition process. The Office of Personnel Management is involved, as is (of late) the Office of Presidential Personnel for the outgoing administration. The presidential transition is an essential part of democracy, policymaking, administration, and the continuity of government. Every four years, the government supports two transitions—one that comes to be and one that closes up shop.

In one way however, Hillary Clinton is entirely wrong. Waiting until you receive the nomination is too late to begin thinking about the transition. As I have written before, every presidential candidate should start thinking about a transition as soon as they announce their candidacy. They don’t need a full Cabinet chosen on Day 1 of the campaign, but they should designate one or two close advisers to organize for the process, begin considering names for posts, think through the types of policies to propose in the first 100 days, and begin what is one of the most complicated managerial tasks in the world.

Hillary Clinton is right “it is important to start planning,” and it’s also never too early to do so. I hope Clinton’s claim that one should start upon securing the nomination is a reflection of that fear of the “drape measuring” accusation. I hope she is planning her transition now. I hope Bernie Sanders and Ted Cruz and Donald Trump and John Kasich and everyone else is planning their transition right now. It’s essential. Clinton knows the challenges of setting up a White House and the complications that early disorganization can cause; she saw that dysfunction first hand in 1993. But most candidates have also worked in or around the White House or have been in politics long enough to know the importance of an effective transition. And candidates who haven’t, like Donald Trump and Carly Fiorina, should be more inclined to set up a transition early, as they have more managerial experience than anyone else in the race.

To this end, I have a modest proposal. It probably won’t happen. It’s likely one that candidates would fear, and it would likely only be effective if everyone is on board. Every current presidential candidate should sign a pledge committing to two things. First, by February 1, 2016, they will designate at least one staffer, adviser or confidante as a transition director.  Second, they will not publicly criticize another candidate—of either party—for having a transition staffer or team in place. Call it a “Transition Truce.” But the reality is that such a pledge—and the actions behind it—are essential for a better functioning, better prepared, more effective administration, no matter who it is who swears the oath exactly one year from today.

A recent article in The Guardian caught my eye: “Report accuses government of increasing inequalities in developing countries by financing academies at the expense of state schools.” The report, conducted by the U.N. Committee on the Rights of the Child, was an attack on U.K. aid money being linked to private education providers since the rapid increase in such schools may be contributing to sub-standard education. In particular, they cited the U.K. government’s investments in the Nairobi-based and for-profit Bridge International Academies.

I’ve worked on private education extensively throughout my career and do not believe there is anything wrong with private schools, but in this particular case I couldn’t agree more. But to be clear, it’s the funding strategy that’s the problem.

Private schooling is on the rise in a number of poor countries, and Pakistan—where my education research is focused—is no exception. The majority of these schools are no longer the elite institutions of yore, but low-cost alternatives fighting for survival in a highly competitive environment. These schools have mushroomed in response to increased parental demand and poor public alternatives, but also to the greater availability of teachers in the local labor market.

More importantly, research increasingly demonstrates that there is absolutely nothing wrong with private schools. There's a summary of this research available here; specific examples on India (more here) and Pakistan are also available.

Some key are takeaways from this research are:

• Private schools charge low fees (about $1 to$2 a month in Pakistan).
• The quality is almost certainly higher compared to government schools in the vicinity.
• At least in Pakistan, there is no significant segregation between public and private schools in terms of parental wealth, education, or caste.
• The most significant barrier to attendance in low-cost private schools is not cost—it’s distance. Put simply, there just aren’t enough of them around.

If there is a cheaper and better alternative to public schooling, shouldn’t we encourage children to shift and thus improve the quality of education for all?

Perhaps. But when the rubber from these well-intentioned aid policies hits the road of rural Pakistan, Kenya, or Ethiopia, a very different sort of model emerges. Instead of supporting private schooling, donors end up supporting private schools (or at best private school chains), which is an entirely different action with little theoretical backing. In fact, economic theory screams that governments and donors should almost never do that.

Donors say the problem is that the low-cost private school market is fragmented with no central authority that can be “contracted with.” No one has a good model on how to work with a competitive schooling sector with multiple small players—ironically, the precise market structure that, according to economics, leads to efficiency.

In reality, I suspect the problem goes deeper. Most low-cost private school owners don’t do well at donor conferences. They don’t know how to tell compelling human-interest stories about the good they do. But what they are excellent at is using local resources to ensure that their schools meet the expectations of demanding parents.

The first is a problem of accountability. Public schools are accountable, through a democratic system, to citizens of the country. Private schools are accountable to the parents. And donor-funded private school chains are account to the donors. While both citizen-led accountability and direct accountability to parents have problems, they are grounded in centuries of experience. It’s unlikely that donors in a foreign land, some of whom can’t visit the schools they fund for security reasons, can do better than either citizens or parents.

The second is a problem of market structure. When one private school or private school chain receives preferential treatment and funding, without allowing other private schools to apply for the same funds, the donor is picking winners (remember Solyndra?). The need for private schools as an alternative to government schools is insufficient justification for donors to put their thumbs on the scale and tilt the balance of power towards a pre-identified entity.

In a recent experiment, my colleagues and I gathered direct proof for this assertion. We gave untied grants to low-cost private schools with a twist. In certain villages, we randomly selected a single private school for the grant. In others, we gave the grant to every private school in the village. Our preliminary results show that in villages where we gave the grant to a single school, the school benefitted enormously from an increase in enrollment. Where we gave the grant to multiple private schools, the enrollment increase was split among schools. But only in the villages where we gave the grant to every school did test-scores for children increase.

What happened? When a single private school receives the grant, knowing that the other schools cannot react due to a lack of funds, they engage in “customer poaching” to increase their profits at the expense of others. Some have argued that Uber’s recent fundraising is precisely such an effort to starve competitors of funding.

When you equally support all private schools, customer poaching does not work, and the only way to increase profits and generate returns is to increase the size of the market, either through higher overall enrollments or through new quality offerings.

The first strategy supports pre-identified private schools and concentrates market power. The second, by providing opportunities for all private schools, improves education for children.

Sure, some private school chains and schools are making positive impact and deserve the support they can get. But funding such schools creates the wrong institutional structures and are more likely to lead to disasters than successes (Greg Mortensen and 3 cups of tea, anyone?).

In general, the Government’s responsibility towards the education of children is two-fold:

• Alleviate the market constraints that hold back private schooling without favoring one school over the other—letting parents decide who succeeds and who does not.
• Support and improve public schools to provide an alternative because there will always be children who cannot enroll in private schools, either because they are too expensive or because they are too far away, or because they don’t offer the instruction “basket” that some parents want.

In short, foreign aid should play no part in supporting private schools rather than private schooling.

A recent article in The Guardian caught my eye: “Report accuses government of increasing inequalities in developing countries by financing academies at the expense of state schools.” The report, conducted by the U.N. Committee on the Rights of the Child, was an attack on U.K. aid money being linked to private education providers since the rapid increase in such schools may be contributing to sub-standard education. In particular, they cited the U.K. government’s investments in the Nairobi-based and for-profit Bridge International Academies.

I’ve worked on private education extensively throughout my career and do not believe there is anything wrong with private schools, but in this particular case I couldn’t agree more. But to be clear, it’s the funding strategy that’s the problem.

Private schooling is on the rise in a number of poor countries, and Pakistan—where my education research is focused—is no exception. The majority of these schools are no longer the elite institutions of yore, but low-cost alternatives fighting for survival in a highly competitive environment. These schools have mushroomed in response to increased parental demand and poor public alternatives, but also to the greater availability of teachers in the local labor market.

More importantly, research increasingly demonstrates that there is absolutely nothing wrong with private schools. There's a summary of this research available here; specific examples on India (more here) and Pakistan are also available.

Some key are takeaways from this research are:

• Private schools charge low fees (about $1 to$2 a month in Pakistan).
• The quality is almost certainly higher compared to government schools in the vicinity.
• At least in Pakistan, there is no significant segregation between public and private schools in terms of parental wealth, education, or caste.
• The most significant barrier to attendance in low-cost private schools is not cost—it’s distance. Put simply, there just aren’t enough of them around.

If there is a cheaper and better alternative to public schooling, shouldn’t we encourage children to shift and thus improve the quality of education for all?

Perhaps. But when the rubber from these well-intentioned aid policies hits the road of rural Pakistan, Kenya, or Ethiopia, a very different sort of model emerges. Instead of supporting private schooling, donors end up supporting private schools (or at best private school chains), which is an entirely different action with little theoretical backing. In fact, economic theory screams that governments and donors should almost never do that.

Donors say the problem is that the low-cost private school market is fragmented with no central authority that can be “contracted with.” No one has a good model on how to work with a competitive schooling sector with multiple small players—ironically, the precise market structure that, according to economics, leads to efficiency.

In reality, I suspect the problem goes deeper. Most low-cost private school owners don’t do well at donor conferences. They don’t know how to tell compelling human-interest stories about the good they do. But what they are excellent at is using local resources to ensure that their schools meet the expectations of demanding parents.

The first is a problem of accountability. Public schools are accountable, through a democratic system, to citizens of the country. Private schools are accountable to the parents. And donor-funded private school chains are account to the donors. While both citizen-led accountability and direct accountability to parents have problems, they are grounded in centuries of experience. It’s unlikely that donors in a foreign land, some of whom can’t visit the schools they fund for security reasons, can do better than either citizens or parents.

The second is a problem of market structure. When one private school or private school chain receives preferential treatment and funding, without allowing other private schools to apply for the same funds, the donor is picking winners (remember Solyndra?). The need for private schools as an alternative to government schools is insufficient justification for donors to put their thumbs on the scale and tilt the balance of power towards a pre-identified entity.

In a recent experiment, my colleagues and I gathered direct proof for this assertion. We gave untied grants to low-cost private schools with a twist. In certain villages, we randomly selected a single private school for the grant. In others, we gave the grant to every private school in the village. Our preliminary results show that in villages where we gave the grant to a single school, the school benefitted enormously from an increase in enrollment. Where we gave the grant to multiple private schools, the enrollment increase was split among schools. But only in the villages where we gave the grant to every school did test-scores for children increase.

What happened? When a single private school receives the grant, knowing that the other schools cannot react due to a lack of funds, they engage in “customer poaching” to increase their profits at the expense of others. Some have argued that Uber’s recent fundraising is precisely such an effort to starve competitors of funding.

When you equally support all private schools, customer poaching does not work, and the only way to increase profits and generate returns is to increase the size of the market, either through higher overall enrollments or through new quality offerings.

The first strategy supports pre-identified private schools and concentrates market power. The second, by providing opportunities for all private schools, improves education for children.

Sure, some private school chains and schools are making positive impact and deserve the support they can get. But funding such schools creates the wrong institutional structures and are more likely to lead to disasters than successes (Greg Mortensen and 3 cups of tea, anyone?).

In general, the Government’s responsibility towards the education of children is two-fold:

• Alleviate the market constraints that hold back private schooling without favoring one school over the other—letting parents decide who succeeds and who does not.
• Support and improve public schools to provide an alternative because there will always be children who cannot enroll in private schools, either because they are too expensive or because they are too far away, or because they don’t offer the instruction “basket” that some parents want.

In short, foreign aid should play no part in supporting private schools rather than private schooling.