This award provides support to Dr. Jonathan Gruber under the National Science Foundation's Presidential Faculty Fellows (PFF) Program. The PFF Program was established at the request of the President of the United States to recognize and support the scholarly activities of some of the Nation's most outstanding science and engineering faculty members early in their careers. Awards are intended to allow Fellows to undertake self-designed, innovative research and teaching projects, to establish research and teaching programs, and to pursue other academic related activities. This award will allow the investigator to pursue his research in public economics, the study of how taxes and government spending programs affect economic activity. His particular specialty is the analysis of social insurance programs. His research has been devoted to investigating two key economic questions about social insurance programs in the U.S. First, how should social insurance programs be financed? Second, what are the benefits of social insurance programs for participants? His research over the five-year period of the award will extend his analysis of the benefits of social insurance programs along three dimensions: health, labor market efficiency, and consumption smoothing. Specifically, he will study the health benefits of public insurance coverage for infants; the effect of public insurance expansions for young children on their utilization of medical care, immunization rates, and health; the utilization and health implications paying physicians more to see publicly insured patients; and the role of social insurance programs in alleviating the consumption fall for those who suffer adverse events such as unemployment. Dr. Gruber has established himself as a major force in economics in just a few short years. His work provides plausible evidence on the behavioral responses of economic agents to exogenous changes in the economic environment that can be used to analyze public policies, test alternative economic theories, and estimate important underlying behavioral parameters. He is also an excellent teacher of undergraduate and graduate students. Last year he was awarded the first Undergraduate Economics Association Teaching Prize. This five year award will enable him to continue his important research as well as to train students in the field of public finance which he has helped to broaden to include public finance, health economics, and labor economics.