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on Insurance Economics |
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Issue of 2008‒09‒20
eight papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Bussiness Management |
| By: | Steven F. Lehrer (School of Policy Studies and Department of Economics, Queen’s University); Nuno Sousa Pereira (CETE, Faculdade de Economia, Universidade do Porto) |
| Abstract: | The United States has the distinction of being the only industrialized nation without universal health insurance. Health insurance may have impacts on the US labor market. We use data on displaced workers over a 25 year period to document how the role of health insurance on wages and worker sorting has evolved. We find that the provision of health insurance increasingly influences wage inequality. Our results indicate that the portion of the unadjusted wage gap due only to selection bias from unobserved (to the analyst) characteristics, such as ability or innate health status has grown rapidly since 2000. Further, while there have been substantial changes in how displaced workers sort to firms that offer health insurance benefits over the last 25 years, many of the patterns have reversed directions over the past six years. Finally, we discuss the policy implications of our results. |
| Keywords: | Health insurance; Worker sorting; Displacement; Comparative advantage; Non-linear instrumental variables |
| JEL: | I11 J33 C23 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:por:cetedp:0804&r=ias |
| By: | Szalay, Dezsö (Economics Department, University of Warwick.) |
| Abstract: | I reconsider Stiglitz's (1977) problem of monopolistic insurance with a continuum of types. Using a suitable transformation of control variables I obtain an analytical characterization of the optimal insurance policies. Closed form solutions and comparative statics results for special cases are provided. |
| Keywords: | nonlinear pricing ; screening ; risk aversion |
| JEL: | D82 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:863&r=ias |
| By: | Adriana Camacho; Emily Conover |
| Abstract: | Colombia's rapid expansion of health insurance coverage in the 1990s provides an opportunity to evaluate whether health insurance coverage positively affects health care usage and outcomes. We use the discontinuity in eligibility for the Subsidized Regime (SR), the subsidized health insurance for the poor, to see if the Subsidized Regime increased the incidence of doctor assisted births, prenatal care, and hospital deliveries; and if it improved newborn health measured by birth weight, gestation period, Apgar score and incidence of low (lbw) and very low birth weight (vlbw). We find that the Subsidized Regime had positive effects on newborn birth weight, but although positive, not consistently significant effects on other health measures or access to medical personnel and facilities. |
| Date: | 2008–08–14 |
| URL: | http://d.repec.org/n?u=RePEc:col:000089:005007&r=ias |
| By: | Jeffrey Liebman; Richard Zeckhauser |
| Abstract: | The behavioral revolution in economics has demonstrated that human beings often have difficulty making wise choices. The most widely chronicled difficulties arise for decisions made under conditions of uncertainty, those whose consequences unfold over significant amounts of time, and decisions made in complex environments. Unfortunately, these are precisely the elements involved when individuals choose a health insurance policy, or decide whether to consume health care services. In this paper, we argue that traditional economic models of insurance are woefully insufficient for analyzing the tradeoffs inherent when giving consumers responsibility for making health care choices. We show that behavioral economics provides a stronger normative justification for many features of our existing health care policy than do the models of traditional economics. We then demonstrate that policy analyses of the wide range of subsidies that permeate the health care system change substantially when viewed from the behavioral perspective. In closing, we discuss how recent policy trends can be fruitfully assessed using a behavioral lens. |
| JEL: | D80 H2 I11 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14330&r=ias |
| By: | Mathieu Gatumel (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Dominique Guegan (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | This paper aims to provide a dynamic analysis of the insurance linked securities index. We are discussing the behaviour of the index for three years and pointing out the consequences of some major events like Katrina or the last and current financial crisis. Some stylized facts of the index, like the non-Gaussianity, the asymmetry or the clusters of volatility, are highlighted. We are using some GARCH-type models and the generalized hyperbolic distributions in order to capture these elements. The GARCH in Mean model with a Normal Inverse Gaussian distribution seems to be very efficient to fit the log-returns of the insurance linked securities index. |
| Keywords: | Insurance Linked Securities, Garch-type models, Normal Inverse Gaussian Distribution |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00320378_v1&r=ias |
| By: | Oleg Sheremet (VU University Amsterdam); André Lucas (VU University Amsterdam) |
| Abstract: | We study the possibility for international diversification of catastrophe risk by the insurance sector. Adopting the argument that large insurance losses may be a `globalizing factor' for the industry, we study the dependence of geographically distant insurance markets via equity returns. In particular, we employ conditional copula theory to model the bivariate dependence of the insurance industry. In contrast to earlier literature on this subject, we disentangle the causes of dependence stemming from the asset side from those from the liability side by conditioning on general market conditions. We find that for both Europe--America and Europe--Asia the dependence is significant. Moreover, we find asymmetric effects: the international dependence is particularly high for losses, even after conditioning for the asset side dependence. Finally, we investigate the time variation in copula parameters and find evidence that dependence in the insurance sector has increased over time, thus reducing the scope for international diversification of large losses in this sector. |
| Keywords: | Catastrophic insurance losses; Copula and dependence; Diversification |
| JEL: | C32 C52 G15 |
| Date: | 2008–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080086&r=ias |
| By: | Pablo Antolin |
| Abstract: | This paper assesses how countries‘ pension arrangements and regulation shape the appropriate structure and flexibility of retirement payout options. The paper aims at providing a guide to policy makers on how to address the diverse questions posed when designing the payout phase or promoting DC pension arrangements, as well as encouraging a market for annuities. The paper addresses questions concerning the type of retirement payout options for accumulated assets in DC plans a country should allow, which entities should provide annuities, and the type of annuity products that could be allowed. The main recommendation is for policy makers to consider mandating deferred life annuities that start paying at very old ages (e.g. at age 85) and allow for the remaining assets accumulated in DC accounts to be allocated as programmed withdrawals (preferably with flexibility to face contingencies). <P>Options s’offrant aux pouvoirs publics pour la phase de versement des pensions <BR>Ce document examine comment les dispositions et réglementations prises par les pays en matière de pensions influent sur la structure et la flexibilité des options qui s‘offrent en phase de versement, une fois la retraite venue. Il vise à servir de guide pour les responsables publics en leur montrant comment aborder les diverses questions qui se posent au moment de fixer les modalités de la phase de versement, ou pour promouvoir des dispositifs de pension à cotisations définies, et aussi encourager un marché de rentes. Le document examine les options qui peuvent s‘envisager en phase de versement des avoirs accumulés sur les plans à cotisations définies, quelles entités devraient être habilitées à servir des rentes et le type de produits de rente qui peut être autorisé. La principale recommandation à l‘intention des responsables publics est d‘imposer des rentes viagères différées qui ne commenceront d‘être servies qu‘à un âge très avancé (par exemple à partir de 85 ans) et de prévoir que le solde des actifs accumulés sur les comptes à cotisations définies pourra être perçu sous la forme de retraits programmés (de préférence avec une marge de flexibilité pour faire face à des imprévus). |
| Keywords: | rente viagère, risque de longévité, Annuities, annuity markets, longevity risk, marches des rentes viagères, annuity providers, deferred life annuities, insurance companies, lump-sums, programmed withdrawal, retirement income, compagnie d’assurances, pourvoyeurs des rentes viagères, rentes viagères diffères, retrait programme, revenue des retraites, versement unique |
| JEL: | D11 D14 D91 E21 G11 G38 J14 J26 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:dafaab:25-en&r=ias |
| By: | Pablo Antolin; Colin Pugh; Fiona Stewart |
| Abstract: | This paper focuses on describing the international practice on the various forms of retirement benefit payment currently allowed in countries throughout the world and the regulatory environment surrounding these different forms of benefit payment. The analysis suggests considerable variance between countries. Some countries only allow one form of retirement payment, while others allow several forms or even a combination of them. Examining country practices as regard the providers of benefit payments, suggest that lump-sums and programmed withdrawals are generally provided by pension funds; while, as regard life annuities, providers varied from insurance companies, to pension funds, financial intermediaries and a centralised annuity fund. The paper ends by examining the role of taxation where a choice between different types of benefit payments is allowed. Tax provision plays a key direct or indirect role in influencing payout options. Cross country evidence is varied but suggests that there is often an unequal tax treatment of the various forms of retirement payout options. <P>Les différentes formes de prestations de retraite <BR>Pour l‘essentiel, ce document décrit les pratiques internationales en vigueur concernant les formes de prestations de retraite actuellement autorisées dans le monde, ainsi que les dispositifs réglementaires qui les régissent. Cette analyse fait ressortir de profondes disparités entre les pays. Certains n‘autorisent en effet qu‘un seul type de prestations, alors que dans d‘autres, plusieurs formules peuvent être envisagées, voir associées. S‘agissant des prestataires, l‘examen des pratiques nationales tend à montrer que les sorties en capital et les retraits programmés sont généralement proposés par des fonds de pension, alors que les rentes viagères sont servies par des compagnies d‘assurance, des fonds de pension, des intermédiaires financiers ou une caisse de retraite centralisée. Ce document s‘achève sur une analyse du rôle joué par la fiscalité lorsque plusieurs types de prestations sont possibles. Les dispositions fiscales exercent alors directement ou indirectement une influence décisive sur le choix des modes de sortie. Les données comparatives concernant les différents pays sont hétérogènes, mais laissent supposer que les divers modes de sortie sont rarement soumis au même régime fiscal. |
| Keywords: | taxation, fiscalité, pension fund, fond de pension, rente viagère, benefit payments at retirement, centralized annuity fund, financial intermediaries, insurance companies, life annuities, lump-sums, programmed withdrawal, regulatory environment, caisse de retraite centralisée, compagnie d’assurances, dispositif réglementaire, intermédiaires financiers, prestations de retraite, retrait programme, sorties en capital |
| JEL: | D14 D91 E21 G11 G38 J14 J26 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:dafaab:26-en&r=ias |