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on Insurance Economics |
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Issue of 2010‒02‒13
nine papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Bussiness Management |
| By: | Juergen Jung (Department of Economics, Towson University); Chung Tran (Department of Economics, University of New South Wales) |
| Abstract: | In this paper we develop a general equilibrium overlapping generations (OLG) model with health shocks to analyze the life-cycle pattern of insurance choice and health care spending. We use data from the Medical Expenditure Panel Survey (MEPS) and show that our model is able to match the life-cycle trends of insurance take up ratios and average medical expenditures in the U.S. We then demonstrate how this model can be used to conduct health care policy analysis by evaluating the macroeconomic effects of a counter factual health care reform using a system of universal health insurance vouchers. Our results suggest that health insurance vouchers are able to extend insurance coverage to the entire population but they also increase aggregate spending on health. More importantly, we find that the positive insurance effect (efficient risk pooling) dominates the negative incentive effect (tax distortions and moral hazard) which results in significant welfare gains for all generations when a payroll tax is used to finance the voucher program. In addition, our results suggest that the choice of tax financing instrument and accounting for general equilibrium price adjustments are critical in determining the performance of the voucher program. |
| Keywords: | Public health insurance, private health insurance, vouchers, dynamic stochastic general equilibrium model, endogenous health production. |
| JEL: | H51 I18 I38 E6 E21 E62 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:tow:wpaper:2010-03&r=ias |
| By: | Reyes Hartley, Gonzalo (Superintendence of Pension Fund Administrators, Chile); van Ours, Jan C. (Tilburg University); Vodopivec, Milan (World Bank) |
| Abstract: | This study examines the determinants of job-finding rates of unemployment benefit recipients under the Chilean program. This is a unique, innovative program that combines social insurance through a solidarity fund (SF) with self-insurance in the form of unemployment insurance savings accounts (UISAs) – so as to mitigate the moral hazard problem of traditional unemployment insurance programs. Our study is the first one to empirically investigate whether UISAs improve work incentives. We find that for beneficiaries using the SF, the pattern of job finding rates over the duration of unemployment is consistent with moral hazard effects, while for beneficiaries relying on UISAs, the pattern is free of such effects. We also find that for benefit recipient not entitled to use the SF, the amount of accumulation on the UISA does not affect the exit rate from unemployment, suggesting that such individuals internalize the costs of unemployment benefits. Our results provide strong support to the idea that UISAs can improve work incentives. |
| Keywords: | unemployment insurance, unemployment duration, savings accounts |
| JEL: | C41 H55 J64 J65 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4681&r=ias |
| By: | and Bertil Holmlund, Susanne Ek (Department of Economics) |
| Abstract: | The paper develops an equilibrium search and matching model where two-person families as well as singles participate in the labor market. We show that equilibrium entails wage dispersion among equally productive risk-averse workers. Marital status as well as spousal labor market status matter for wage outcomes. In general, employed members of two-person families receive higher wages than employed singles. The model is applied to a welfare analysis of alternative unemployment insurance systems, recognizing the role of spousal employment as partial substitute for public insurance. The optimal system involves benefit differentiation based on marital status as wellas spousal labor market status. Optimal differentiation yields small welfare gains but gives rise to large wage differentials. |
| Keywords: | Job search; wage bargaining; wage differentials; unemployment; unemployment insurance |
| JEL: | J31 J64 J65 |
| Date: | 2010–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uunewp:2010_002&r=ias |
| By: | Ek, Susanne (Uppsala University); Holmlund, Bertil (Uppsala University) |
| Abstract: | The paper develops an equilibrium search and matching model where two-person families as well as singles participate in the labor market. We show that equilibrium entails wage dispersion among equally productive risk-averse workers. Marital status as well as spousal labor market status matter for wage outcomes. In general, employed members of two-person families receive higher wages than employed singles. The model is applied to a welfare analysis of alternative unemployment insurance systems, recognizing the role of spousal employment as a partial substitute for public insurance. The optimal system involves benefit differentiation based on marital status as well as spousal labor market status. Optimal differentiation yields small welfare gains but gives rise to large wage differentials. |
| Keywords: | job search, wage bargaining, wage differentials, unemployment, unemployment insurance |
| JEL: | J31 J64 J65 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4701&r=ias |
| By: | Janko Gorter; Paul Schilp |
| Abstract: | We analyze a clear-cut example of choice under uncertainty, namely deductible choice in the Dutch health insurance market. The unique institutional features of this market enable us to examine demand-side choices that only vary in their financial parameters. Using a rich dataset, we investigate the theoretical determinants of deductible choice. In line with expected-utility theory, we find that healthier, wealthier and more risk-tolerant consumers choose higher levels of deductibility. Consumer choice for financial risk is thus driven by various considerations, not only by risk type. Heterogeneity in risk preferences seems at least as important in explaining financial risk-taking. These results are not only relevant to insurance markets but to all markets where consumers decide on financial risk. |
| Keywords: | Financial Risk; Risk Tolerance; Adverse Selection; Deductible; Insurance |
| JEL: | D12 D81 G22 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:238&r=ias |
| By: | Engelbert Theurl (Department of Economics and Statistics, University of Innsbruck, Austria); Hannes Winner |
| Abstract: | Empirical evidence from U.S. studies suggests that, on average, female physicians earn less than their male counterparts. This gap in earnings does not disappear when individual and market characteristics are con- trolled for. This paper investigates whether a gender earnings difference can also be observed in a health care system predominantly financed by public insurance companies. Using a unique data set of physicians' earn- ings recorded by a public social security agency in an Austrian province between 2000 and 2004, we find a gender gap in average earnings of about 32 percent. A substantial share of this gap (20 to 47 percent) cannot be explained by individual and market characteristics, leaving labor market discrimination as one possible explanation for the observed gender earn- ings difference of physicians. |
| Keywords: | Health care financing; physician earnings; wage composition |
| JEL: | I11 I18 J31 J71 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:jku:nrnwps:2010_01&r=ias |
| By: | van Ours, Jan C. (Tilburg University); Tuit, Sander (Tilburg University) |
| Abstract: | We study how changes in the maximum benefit duration affect the inflow into unemployment in the Netherlands. Until August 2003, workers who became unemployed after age 57.5 were entitled to unemployment benefits until the age of 65, after which they would receive old age pensions. This characteristic made it attractive for workers to enter unemployment shortly after age 57.5 rather than shortly before. Indeed, we find a peak in the inflow into unemployment for workers after age 57.5. From August 2003 onwards the maximum benefit durations were reduced. We find that shortly after 2003 the peak in the inflow disappeared. |
| Keywords: | unemployment insurance, potential benefit duration, unemployment inflow |
| JEL: | H55 J64 J65 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4691&r=ias |
| By: | Xavier Milhaud (SAF - Laboratoire de Sciences Actuarielle et Financière - Université Claude Bernard - Lyon I : EA2429, Axa Cessions - AXA); Stéphane Loisel (SAF - Laboratoire de Sciences Actuarielle et Financière - Université Claude Bernard - Lyon I : EA2429); Véronique Maume-Deschamps (SAF - Laboratoire de Sciences Actuarielle et Financière - Université Claude Bernard - Lyon I : EA2429) |
| Abstract: | This paper shows that some policy features are crucial to explain the decision of the policyholder to surrender her contract. We point it out by applying two segmentation models to a life insurance portfolio: the Logistic Regression model and the Classification And Regression Trees model. Protection as well as Savings lines of business are impacted, and results clearly explicit that the profit benefit option is highly discrimi- nant. We develop the study with endowment products. First we present the models and discuss their assumptions and limits. Then we test different policy features and policyholder's characteristics to be lapse triggers so as to segment a portfolio in risk classes regarding the surrender choice : duration and profit benefit option are essential. Finally, we explore the main dfferences of both models in terms of operational results. |
| Date: | 2010–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00450003_v1&r=ias |
| By: | John Schmitt |
| Abstract: | This report reviews unionization rates, the size and composition of the unionized workforce, and the wage and benefit advantage for union workers in each of the fifty states and the District of Columbia, using the most recent data available and focusing on the period 2003-2009. Pooling data from the monthly Current Population Survey (CPS) over that period yields a sample size large enough to look at the experience of even the smallest states. |
| Keywords: | unions, states, wages, benefits, pension, health insurance |
| JEL: | J J1 J3 J31 J32 J41 J5 J58 J6 J68 J88 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2010-03&r=ias |