nep-hea New Economics Papers
on Helth Economics
Issue of 2005‒01‒02
thirteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. The Impact of Low Income on Child Health: Evidence from a Birth Cohort Study By Simon Burgess; Carol Propper; John A. Rigg
  2. Equal Treatment of People with Disabilities in the EC: What does “Equal” mean? By Zoe Apostolopoulou
  3. Portfolio decisions on life annuities and financial assets with longevity and income uncertainty By Susanne Pech
  4. Macroeconomic Conditions, Health and Mortality By Christopher J. Ruhm
  5. Macroeconomic Aspects of Substance Abuse: Diffusion, Productivity and Optimal Control By Levy, Amnon; Neri, Frank
  7. Self-assessed health, reference levels, and mortality By Hendrik Jürges
  8. Design the Financial Tool to Promote Universal Free Access to AIDS Care By Patrick Leoni; Stéphane Luchini
  9. Illustrating Adverse Selection in Health Insurance Markets with a Classroom Game By Jennifer M. Mellor
  10. State Social Capital and Individual Health Status By Jennifer M. Mellor; Jeffrey Milyo
  11. A Cross-Country Analysis of Household Responses to Adult Mortality in Rural Sub-Saharan Africa: Implications for HIV/AIDS Mitigation and Rural Development Policies By David Mather; Cynthia Donovan; T. S. Jayne; Michael Weber; Edward Mazhangara; Linda Bailey; Kyeongwon Yoo; Takashi Yamano; Elliot Mghenyi
  12. Is the Medical Brain Drain Beneficial? Evidence from Overseas Doctors in the UK By Simon Commander; Mari Kangasniemi; L. Alan Winters
  13. Instrumental Variables for Binary Treatments with Heterogeneous Treatment Effects: A Simple Exposition By Alan Manning

  1. By: Simon Burgess; Carol Propper; John A. Rigg
    Abstract: There is a growing literature that shows that higher family income is associated with better health for children. Wealthier parents may have more advantaged children because they have more income to buy health care or because parental wealth is associated with beneficial behaviours or because parental health is associated with both income and children¿s health. The policy implications of these transmission mechanisms are quite different. We attempt to unpick the correlation between income and health by examining routes by which parental disadvantage is transmitted into child disadvantage. Using a UK cohort study that has rich information on mother¿s early life events, her health, her behaviours that may affect child health, and her child¿s health, we examine the impact of being in low income compared to that of mother child health related behaviours and mother¿s own health on child health. We find children from poorer households have poorer health. But we find the direct impact of income is small. A larger role is played by mother¿s own health and events in her early life. No clear role is played by mother child health production behaviours.
    Keywords: child health, income, maternal health, tranmission mechanisms
    JEL: I1
    Date: 2004–05
  2. By: Zoe Apostolopoulou
    Abstract: Expecting the elaboration of national legislation to implement Directive 2000/78/EEC prohibiting, inter alia, discrimination on the grounds of disability in employment and occupation, and the consequent arise of judicial litigation, this paper attempts to contribute to a better understanding of this legislative instrument. To achieve this purpose, it is assumed that equality is generally perceived in two competing and at the same time complementary ways. In its traditional formal sense, it has been linked to state neutrality and procedural justice. In its modern, substantive sense, equality has a remedial role to play, requiring a cautious examination of societal reality and collective anticipation of discriminatory phenomena. It is subsequently examined to what extent and in what way the most crucial provisions of Directive 2000/78/EEC on disability discrimination fit in each of the above-mentioned equality models.
    Keywords: positive action
    Date: 2004–12–12
  3. By: Susanne Pech (Department of Economics, Johannes Kepler University Linz, Austria)
    Abstract: There are two stylised facts, namely weak demand for life-annuities and flat age-wealth profile that contradict the life-cycle hypothesis. In this paper we design a theoretical framework, which combines plausible arguments, which have been put forward in the literature to reconcile theory with empirical evidence. Besides the existence of an annuity market and of a public pension system we assume risk-averse individuals who are uncertain about lifetime and disposable income and who have preferences for leaving bequests. It is shown that this framework can contribute to explain the observed portfolio decision in favour of financial assets relatively to annuities.
    Keywords: savings; life annuities; bequests; uncertain lifetime; uncertain income; social security
    JEL: D81 D91 G22 H55
    Date: 2004–12
  4. By: Christopher J. Ruhm
    Abstract: Although health is conventionally believed to deteriorate during macroeconomic downturns, the empirical evidence supporting this view is quite weak and comes from studies containing methodological shortcomings that are difficult to remedy. Recent research that better controls for many sources of omitted variables bias instead suggests that mortality decreases and physical health improves when the economy temporarily weakens. This partially reflects reductions in external sources of death, such as traffic fatalities and other accidents, but changes in lifestyles and health behaviors are also likely to play a role. This paper summarizes our current understanding of how health is affected by macroeconomic fluctuations and describes potential mechanisms for the effects.
    JEL: E32 I12
    Date: 2004–12
  5. By: Levy, Amnon (University of Wollongong); Neri, Frank (University of Wollongong)
    Abstract: This paper deals dynamically with macroeconomic aspects of widespread substance abuse with a reference to illicit drugs as an example. Substance-abuse impedes the productivity of the labour force and subsequently economic growth. The labour force is divided into non-using and therefore fully productive workers, a number of whom are employed by the government in drug-control activities, and drug users who are only partially productive. An efficient management of the nation's portfolio of workers is taken to be the trajectory of drug-control that maximises the present value of the stream of disposable national incomes.
    Keywords: Substance abuse, labour productivity, national income, optimal control
    JEL: I12 J21 J24 D90
    Date: 2004
  6. By: sivakumarmarimuthu (Chikkaih Naicker College); sarvalingam (Chikkaih Naicker College)
    Abstract: This paper deals with poverty, health, education and human deprivation among Indian States. Human development evaluates development in conglomerative perspective where as human depeivation analyse it in deprivational perspective. Deprivation in poverty, health, education lead the poor to indulge in the vicious circle. Uplifting the poor from these deprivations is imperative for overall development. This paper proposes a new formula to analyse human deprivation by the help of poverty line, illiteracy rate and infant mortality rate indicators.
    Keywords: poverty,health, education,human development,human deprivation
    JEL: I
    Date: 2004–12–28
  7. By: Hendrik Jürges (Mannheim Research Institute for the Economics of Aging (MEA))
    Abstract: The paper studies the relationship between self-assessed health and subsequent mortality in the German Socio-Economic Panel. Specifically, I examine whether socio-economic characteristics of respondents have an effect on mortality, conditional on self-assessed health. Such conditional effects are shown to exist for many covariates, including age, sex, income, and education. These findings question the comparability of self-assessed health across different socio-economic groups.
    Date: 2004–08–20
  8. By: Patrick Leoni; Stéphane Luchini
    Abstract: Typical of the AIDS epidemics is that governments in developing countries under-invest in drugs production because of the possible appearance of a curative vaccine. We design a financial tool allowing to hedge against this event. We show that the introduction of this asset increases social welfare, as well as the number of patients treated and the provision of public good.
    Keywords: option design, AIDS, social choices
    JEL: G13 I12
  9. By: Jennifer M. Mellor (Department of Economics, College of William and Mary)
    Abstract: This paper describes a classroom game that illustrates the effects of asymmetric information and adverse selection in health insurance markets. The first phase of this game simulates a market in which buyers can purchase insurance from sellers who sometimes lack information about buyer type. The results demonstrate the classic prediction that asymmetric information will result in adverse selection. Here, low risk buyers will forego the purchase of insurance at a measurable loss of potential earnings. In the second phase of the game, sellers and buyers can trade two different types of health insurance policies, one moderate and another generous. The results from this simulation demonstrate how adverse selection can lead to an inefficient sorting of buyers across plans, an outcome that is discussed in Cutler and Zeckhauser (1997). In this case, too few buyers elect to purchase the generous insurance plan. The paper provides a series of questions to stimulate class discussion on the causes and consequences of adverse selection for consumers and insurers, and solutions that can be implemented in employer and government-sponsored programs.
    Keywords: Classroom, Experiment, Adverse selection
    JEL: A2 C9 D4 I1
    Date: 2004–12–10
  10. By: Jennifer M. Mellor (Department of Economics, College of William and Mary); Jeffrey Milyo (Department of Economics and Truman School of Public Affairs, University of Missouri)
    Abstract: Recent studies have found that two state-level measures of social capital, average levels of civic participation and trust, are associated with improvements in individual health status. In this study we employ these measures, together with the Putnam (2000) index, to examine several key aspects of the relationship between state social capital and individual health. We find that for all three measures, the association with health status persists after carefully adjusting for household income, and that for two measures, mistrust and the Putnam index, the size of this association warrants further attention. Using the Putnam index, we find particular support for the hypothesis that social capital has a more pronounced salutary effect for the poor. Our findings generate both support for the social capital and health hypothesis and a number of implications for future research.
    Keywords: health status, social capital
    JEL: I12 Z13
    Date: 2004–09–15
  11. By: David Mather (Department of Agricultural Economics, Michigan State University); Cynthia Donovan; T. S. Jayne; Michael Weber; Edward Mazhangara; Linda Bailey; Kyeongwon Yoo; Takashi Yamano; Elliot Mghenyi
    Abstract: This paper summarizes and synthesizes across the results of a set of country studies on the effects of prime-age adult mortality on rural households in Kenya, Malawi, Mozambique, Rwanda, and Zambia. Each study is based on large representative rural household surveys. These findings have implications for the design of efforts to mitigate some of the most important effects of rural adult mortality, and for key development policies and priorities.
    Keywords: HIV/AIDS, sub-Saharan Africa, mortality
    JEL: I11
    Date: 2004
  12. By: Simon Commander; Mari Kangasniemi; L. Alan Winters
    Abstract: The ¿beneficial brain drain¿ hypothesis suggests that skilled migration can be good for a sending countrybecause the incentives it creates for training increase that country¿s supply of skilled labour. To work, thishypothesis requires that the degree of screening of migrants by the host country is limited and that thepossibility of migration actually encourages home country residents to obtain education. We studied theimplications of doctors¿ migration by conducting a survey among overseas doctors in the UK. The resultssuggest that the overseas doctors who come to the UK are carefully screened and that only a minority of doctorsfrom developing countries considered the possibility of migration when they chose to obtain medical education.The incentive effect is thus probably not large enough to increase the skills-supply in developing countries.Doctors do, however, remit income to their home countries and many intend to return after completing theirtraining in the UK, so there could be benefits via these routes.
    Keywords: brain drain, international labour market, professional labour markets, doctors, physicians,international migration
    JEL: F22 J44 J61
    Date: 2004–02
  13. By: Alan Manning
    Abstract: This note provides a simple exposition of what IV can and cannot estimate in a model with abinary treatment variable and heterogeneous treatment effects. It shows how linear IV is amisspecification of functional form and the reason why linear IV estimates for this model willalways depend on the instrument used is because of this misspecification. It shows that if onecan estimate the correct functional form (non-linear IV) then the treatment effects areindependent of the instrument used. However, the data may not be rich enough in practice tobe able to identify these treatment effects without strong distributional assumptions. In thiscase, one will have to settle for estimates of treatment effects that are instrument-dependent.
    Keywords: Instrumental Variables, treatment effects, identification
    JEL: C2
    Date: 2004–02

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