nep-hea New Economics Papers
on Helth Economics
Issue of 2004‒12‒20
twelve papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Fluctuations in a Dreadful Childhood: Synthetic Longitudinal Height Data, Relative Prices and Weather in the Short-Term Health of American Slaves By Richard H. Steckel
  2. The Interaction of Public and Private Insurance: Medicaid and the Long-Term Care Insurance Market By Jeffrey R. Brown; Amy Finkelstein
  3. Tobacco Spending and its Crowd-Out of Other Goods By Susan H. Busch; Mireia Jofre-Bonet; Tracy A. Falba; Jody L. Sindelar
  4. Prescription Drugs, Medical Care, and Health Outcomes: A Model of Elderly Health By Zhou Yang; Donna B. Gilleskie; Edward C. Norton
  5. Why Should We Care About Child Labor? The Education, Labor Market, and Health Consequences of Child Labor By Kathleen Beegle; Rajeev Dehejia; Roberta Gatti
  6. Immigrant Health--Selectivity and Acculturation By Guillermina Jasso; Douglas S. Massey; Mark R. Rosenzweig; James P. Smith
  7. Bounds in Competing Risks Models and the War on Cancer By Bo E. Honore; Adriana Lleras Muney
  8. How Effective is Lifetime Health Cover in Raising Private Health Insurance Coverage in Australia? An Assessment Using Regression Discontinuity By Alfons Palangkaraya; Jongsay Yong
  9. Building a Panel Survey on Health, Aging and Retirement in Europe By Axel Börsch-Supan, Hendrik Jürges and Oliver Lipps
  10. Workforce Issues in the Greater Boston Health Care Industry: Implications for Work and Family By Harrington, Mona; Bookman, Ann; Bailyn, Lotte; Kochan, Thomas
  11. Tax Policy for Health Insurance By Jonathan Gruber
  12. The Case of the Detrimental Drug: Implications for the Stakeholder Theory of Directorship By JS Armstrong

  1. By: Richard H. Steckel
    Abstract: For over a quarter century anthropometric historians have struggled to identify and measure the numerous factors that affect adult stature, which depends upon diet, disease and physical activity from conception to maturity. I simplify this complex problem by assessing nutritional status in a particular year using synthetic longitudinal data created from measurements of children born in the same year but measured at adjacent ages, which are abundantly available from 28,000 slave manifests housed at the National Archives. I link this evidence with annual measures of economic conditions and new measures of the disease environment to test hypotheses of slave owner behavior. Height-by-age profiles furnish clear evidence that owners substantially managed slave health. The short-term evidence shows that weather affected growth via exposure to pathogens and that owners modified net nutrition in response to sustained price signals.
    JEL: N3 I1
    Date: 2004–12
  2. By: Jeffrey R. Brown; Amy Finkelstein
    Abstract: We show that the provision of even incomplete public insurance can substantially crowd out private insurance demand. We examine the interaction of the public Medicaid program with the private market for long-term care insurance and estimate that Medicaid can explain the lack of private insurance purchases for at least two-thirds and as much as 90 percent of the wealth distribution, even if comprehensive, actuarially fair private policies were available. Medicaid's large crowd out effect stems from the very large implicit tax (on the order of 60 to 75 percent for a median wealth individual) that Medicaid imposes on the benefits paid from private insurance policies. Importantly, Medicaid itself provides an inadequate mechanism for smoothing consumption for most individuals, so that its crowd out effect has important implications for overall risk exposure. An implication of our findings is that public policies designed to stimulate private insurance demand will be of limited efficacy as long as Medicaid continues to impose this large implicit tax.
    JEL: H4 H51 I11 J14
    Date: 2004–12
  3. By: Susan H. Busch; Mireia Jofre-Bonet; Tracy A. Falba; Jody L. Sindelar
    Abstract: Smoking is an expensive habit. Smoking households spend, on average, more than $1000 annually on cigarettes. For households in which some members smoke, smoking expenditures crowd-out other purchases, which may affect other household members, as well as the smoker. We empirically analyze how expenditures on tobacco crowd out consumption of other goods, estimating the patterns of substitution between tobacco products and other expenditures. We use the Consumer Expenditure Survey (1995 to 2001), which we complement with regional price data, and state cigarette prices. We estimate a consumer demand system of expenditures on cigarettes, food, alcohol, housing, apparel, transportation, medical care and controls for socio-economic variables and other sources of observable heterogeneity. Descriptive data indicate that, compared to non-smokers, smokers spend less on housing. Results from the demand system indicate that as the price of cigarettes rises, households increase the quantity of food purchased, and, in some samples, reduce the quantity of apparel and housing purchased.
    JEL: I1
    Date: 2004–12
  4. By: Zhou Yang; Donna B. Gilleskie; Edward C. Norton
    Abstract: There is much debate about whether the Medicare Prescription Drug Bill %u2013 the greatest expansion of Medicare benefits since its creation in 1965 %u2013 will improve the health of elderly Americans, and how much it will cost. We model how insurance affects medical care utilization, and subsequently, health outcomes over time in a dynamic model with correlated errors. Longitudinal individual-level data from the 1992-1998 Medicare Current Beneficiary Survey provide estimates of these effects. Simulations over five years show that expanding prescription drug coverage would increase drug expenditures by between 12% and 17%. However, other health care expenditures would only increase slightly, and the mortality rate would improve.
    JEL: I12 I18 H5
    Date: 2004–12
  5. By: Kathleen Beegle; Rajeev Dehejia; Roberta Gatti
    Abstract: Although there is an extensive literature on the determinants of child labor and many initiatives aimed at combating it, there is limited evidence on the consequences of child labor on socio-economic outcomes such as education, wages, and health. We evaluate the causal effect of child labor participation on these outcomes using panel data from Vietnam and an instrumental variables strategy. Five years subsequent to the child labor experience, we find significant negative impacts on school participation and educational attainment, but also find substantially higher earnings for those (young) adults who worked as children. We find no significant effects on health. Over a longer horizon, we estimate that from age 30 onward the forgone earnings attributable to lost schooling exceed any earnings gain associated with child labor and that the net present discounted value of child labor is positive for discount rates of 11.5 percent or higher. We show that child labor is prevalent among households likely to have higher borrowing costs, that are farther from schools, and whose adult members experienced negative returns to their own education. This evidence suggests that reducing child labor will require facilitating access to credit and will also require households to be forward looking.
    JEL: D19 J22 J82 O15 Q12
    Date: 2004–12
  6. By: Guillermina Jasso (New York University); Douglas S. Massey (University of Pennsylvania); Mark R. Rosenzweig (University of Pennsylvania); James P. Smith (RAND)
    Abstract: This paper explores some salient issues concerning immigrant health. Ethnic health disparities are inherently linked to immigration since ethnic identities often are traced to the country of origin of one's immigrant ancestors. Two of the central questions that have dominated the medical and social science literature on immigrant health are the central focus of this paper. These issues involve the magnitude and mechanisms shaping health selectivity and the determinants of health trajectories following immigration. As part of this paper, we also developed a theoretical model that attempts to explain the diversity in health selection among immigrants.
    JEL: J
    Date: 2004–12–10
  7. By: Bo E. Honore; Adriana Lleras Muney
    Abstract: In 1971 President Nixon declared war on cancer and increased the federal funds allocated to cancer research dramatically. Thirty years later, many have declared this war a failure. Overall cancer statistics confirm this view: age-adjusted mortality in 2000 was essentially unchanged from the early 1970s. At the same time, age-adjusted mortality rates from cardiovascular disease have fallen quite dramatically. Since the causes underlying cancer and cardiovascular disease are likely to be correlated, the decline in mortality rates from cardiovascular disease may be somewhat responsible for the rise in cancer mortality. It is natural to model mortality with more than one cause of death as a competing risks model. Such models are fundamentally unidentified, and it is therefore difficult to get a clear picture of the progress in cancer. This paper derives bounds for aspects of the underlying distributions under a number of different assumptions. Most importantly, we do not assume that the underlying risks are independent, and impose weak parametric assumptions in order to obtain identification. The theoretical contribution of the paper is to provide a framework to estimate competing risk models with interval data and discrete explanatory variables, both of which are common in empirical applications. We use our method to estimate changes in cancer and cardiovascular mortality since 1970. The estimated bounds for the effect of time on the duration until death for either cause are fairly tight and we find that trends in cancer show much larger improvements than previously estimated. For example, we find that time until death from cancer increased by about 10% for white males and 20% for white women.
    JEL: I10 C40
    Date: 2004–12
  8. By: Alfons Palangkaraya (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); Jongsay Yong (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)
    Abstract: The Australian government introduced three major private health insurance policy initiatives in recent years. These are, in chronological order, (i) the Private Health Insurance Incentives Scheme (PHIIS), which imposes a tax levy on high-income earners who do not have PHI, and provides a means-tested subsidy schedule for low-income earners who purchase PHI; (ii) a 30% premium rebate for all private health insurance policies to replace the means-tested component under PHIIS; and (iii) Lifetime Health Cover, which permits a limited form of age-related risk rating by insurance funds. Together, these policy changes have been effective in encouraging the uptake of PHI; the percentage of the population covered by PHI rose from 31% in 1999 to 45% at the end of 2001. The difficult issue, however, is in disentangling the effects of the three policy changes, given that they were introduced in quick succession. This paper attempts to evaluate the effect of Lifetime Health Cover using a regression discontinuity design, an approach that makes use of cross-section data that allows the effect of Lifetime Health Cover to be isolated via local regression. The results suggest that the importance of Lifetime Health Cover appears to be grossly over-rated in previous studies. Our estimates indicate that it accounts for roughly 30% to 44% of the combined effects of all the policy initiatives introduced in the late 1990s. While these figures suggest that its effect is clearly significant, it is nonetheless nowhere near the effect often associated with Lifetime Health Cover.
    Date: 2004–12
  9. By: Axel Börsch-Supan, Hendrik Jürges and Oliver Lipps (Mannheim Research Institute for the Economics of Aging (MEA))
    Abstract: Ageing is one of the greatest social and economic challenges of the 21st century in Europe. SHARE, a EU-sponsored project that will build up a Survey of Health, Aging and Retirement in Europe, will be a fundamental resource for science and public policy to help mastering this unprecedented challenge. The main aim of SHARE is to create a pan-European interdisciplinary panel data set covering persons aged 50 and over. The project brings together many disciplines, including epidemiology, sociology, statistics, psychology, demography, and economics. Scientists from some 15 countries work on feasibility studies, experiments, and instrument development, culminating in a survey of about 22.000 individuals. The multidisciplinary nature of the data will provide new insights in the complex interactions between economic, health, psychological and social factors determining the quality of life of the elderly.
    Date: 2003–07–05
  10. By: Harrington, Mona; Bookman, Ann; Bailyn, Lotte; Kochan, Thomas
    Abstract: This working paper synthesizes critical problems identified by interviews with more than 40 leaders in the Boston area health care industry and places them in the context of work and family issues. At present, the defining circumstance for the health care industry nationally as well as regionally is an extraordinary reorganization, not yet fully negotiated, in the provision and financing of health care. Hoped-for controls on increased costs of medical care have fallen far short of their promise. Pressures to limit expenditures have produced dispiriting conditions for the entire healthcare workforce. Under such strains, relations between managers and workers providing care are uneasy. Five key issues affect a broad cross-section of occupational groups, albeit in different ways: staffing shortages; long work hours and inflexible schedules; degraded and unsupportive working conditions; lack of opportunities for training and advancement; professional and employee voices are insufficiently heard. The paper concludes with possible ways to address such issues.
    Keywords: health care, work family, staffing shortages, work schedules,
    Date: 2004–12–10
  11. By: Jonathan Gruber
    Abstract: Despite a $140 billion existing tax break for employer-provided health insurance, tax policy remains the tool of choice for many policy-makers in addressing the problem of the uninsured. In this paper, I use a microsimulation model to estimate the impact of various tax interventions to cover the uninsured, relative to an expansion of public insurance designed to accomplish the same goals. I contrast the efficiency of these policies along several dimensions, most notably the dollars of public spending per dollar of insurance value provided. I find that every tax policy is much less efficient than public insurance expansions: while public insurance costs the government only between $1.17 and $1.33 per dollar of insurance value provided, tax policies cost the government between $2.36 and $12.98 per dollar of insurance value provided. I also find that targeting is crucial for efficient tax policy; policies tightly targeted to the lowest income earners have a much higher efficiency than those available higher in the income distribution. Within tax policies, tax credits aimed at employers are the most efficient, and tax credits aimed at employees are the least efficient, because the single greatest determinant of insurance coverage is being offered insurance by your employer, and because most employees who are offered already take up that insurance. Tax credits targeted at non-group coverage are fairly similar to employer tax credits at low levels, but much less efficient at higher levels.
    JEL: H2 I1
    Date: 2004–12
  12. By: JS Armstrong (The Wharton School - University of Pennsylvania)
    Abstract: The Winter 1979 issues of Directors and Boards presented readers with a questionnaire based to a degree on a 1969 board incident at Upjohn Corporation [see Box 1 (on page 2) and Box 2 (on pages 3-4)]. In this questionnaire, a profitable drug named “Wondola” was being produced by the so-called International Drug Corporation (IDC). Readers were told that members of the American Medical Association's Council on Drugs had objected to the sale of most fixed -ratio (combination) drugs on the grounds that they grant no benefits superior to those of single- ingredient drugs, and are more likely to produce detrimental side effects, including death. Wondola, with an approximated fatality record of 14 to 22 deaths per year, was no exception. The Federal Drug Administration had asked IDC to withdraw the drug. Readers were asked how they would have voted at a board meeting called to resolve the withdrawal issue. Several months after the publication of the first questionnaire, follow-up questionnaires were sent to D&B readers and to select corporate constituents. These letters solicited comments on a “stakeholder” theory of board membership which I proposed in conjunction with the Wondola experiment. In the following pages, I present the background of the experiment. The stakeholder theory will then be proposed as a solution to the “responsiblity dilemma” the Wondola case raises. Finally, questionnaire respondents will speak for themselves on this complex issue.
    Keywords: stakeholder theory, responsiblity dilemma, drug,
    JEL: A
    Date: 2004–12–10

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