nep-hea New Economics Papers
on Health Economics
Issue of 2006‒06‒17
twelve papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. True Health vs. Response Styles : Exploring Cross-country Differences in Self-reported Health By Hendrik Jürges
  2. Sickness Absence and the Effects of Having a Spouse - Can twins reveal the selection effect? By Nilsson, william
  3. Disease and Development: The Effect of Life Expectancy on Economic Growth By Daron Acemoglu; Simon Johnson
  4. Love or Money? Health Insurance and Retirement Among Married Couples By Kanika Kapur; Jeannette Rogowski
  5. Balancing the Goals of Health Care Provision By Martin Feldstein
  6. Sources of Advantageous Selection: Evidence from the Medigap Insurance Market By Hanming Fang; Michael P. Keane; Dan Silverman
  7. Beyond BMI: The Value of More Accurate Measures of Fatness and Obesity in Social Science Research By John Cawley; Richard V. Burkhauser
  8. Even For Teenagers, Money Does Not Grow on Trees: Teenage Substance Use and Budget Constraints By Sara Markowitz; John Tauras
  9. Award errors and permanent disability benefits in Spain By Sergi Jiménez-Martín; José M. Labeaga; Cristina Villaplana Prieto
  10. Migration and Mental Health: Evidence from a Natural Experiment By Steven Stillman; David McKenzie; John Gibson
  11. Are fixed-term jobs bad for your health? : a comparison of West-Germany and Spain By Gash, Vanessa; Mertens, Antje; Romeu Gordo, Laura
  12. Compression of morbidity and the labor supply of older people By Romeu Gordo, Laura

  1. By: Hendrik Jürges
    Abstract: The aim of this paper is to decompose cross-national differences in self-reported general health into parts explained by differences in "true" health, measured by diagnosed conditions and measurements, and parts explained by cross-cultural differences in response styles. The data used were drawn from the Survey of Health, Ageing and Retirement in Europe 2004 (SHARE), using information from 22,000 individuals aged 50 and over from 10 European countries. Self-rated general health shows large cross-country variations. According to their self-reports, the healthiest respondents live in the Scandinavian countries and the least healthy live in Southern Europe. Counterfactual self-reported health distributions that assume identical response styles in each country show much less variation in self-reports than factual selfreports. Danish and Swedish respondents tend to largely over-rate their health (relative to the average) whereas Germans tend to under-rate their health. If differences in reporting styles are taken into account, cross-country variations in general health are reduced but not eliminated. Failing to account for differences in reporting styles may yield misleading results.
    Keywords: Self-assessed health, response bias, cross-national study
    JEL: C42 I12
    Date: 2006
  2. By: Nilsson, william (Department of Economics, Umeå University)
    Abstract: <p> Individuals that are married are often found to be healthier than singles. A crucial issue is to distinguish if this is due to a <p> selection effect or due to a true protective effect of partnership. The purpose of this study is to distinguish these effects as explanations for a lower risk of having long-term sickness among individuals with a spouse. In this study an innovative method based on information on twins is developed to reveal the selection effect into partnership that provides a lower risk for long-term sickness absence. Important selections are found for both male and female samples.
    Keywords: sickness absence; spouse; heterogeneity; selection; twins
    JEL: C35 I12 J12
    Date: 2006–06–07
  3. By: Daron Acemoglu; Simon Johnson
    Abstract: What is the effect of increasing life expectancy on economic growth? To answer this question, we exploit the international epidemiological transition, the wave of international health innovations and improvements that began in the 1940s. We obtain estimates of mortality by disease before the 1940s from the League of Nations and national public health sources. Using these data, we construct an instrument for changes in life expectancy, referred to as predicted mortality, which is based on the pre-intervention distribution of mortality from various diseases around the world and dates of global interventions. We document that predicted mortality has a large and robust effect on changes in life expectancy starting in 1940, but no effect on changes in life expectancy before the interventions. The instrumented changes in life expectancy have a large effect on population; a 1% increase in life expectancy leads to an increase in population of about 1.5%. Life expectancy has a much smaller effect on total GDP both initially and over a 40-year horizon, however. Consequently, there is no evidence that the large exogenous increase in life expectancy led to a significant increase in per capita economic growth. These results confirm that global efforts to combat poor health conditions in less developed countries can be highly effective, but also shed doubt on claims that unfavorable health conditions are the root cause of the poverty of some nations.
    JEL: I10 O40 J11
    Date: 2006–06
  4. By: Kanika Kapur; Jeannette Rogowski
    Abstract: This paper examines the role of employer provided health insurance in the retirement decisions of dual working couples. The near elderly have high-expected medical expenditures; therefore, availability of health insurance is an important factor in their retirement decisions. We determine if access to retiree health insurance for early retirement enables couples to time their retirement together – a behavior called “joint retirement.” We find that wives’ retiree health insurance more than doubles the propensity to retire jointly, suggesting that health insurance is an important consideration in coordinating retirement decisions among couples. Even though retiree health insurance has a substantial effect on joint retirement, its effect on overall employment patterns is modest, accounting for a 2 percentage point fall in employment.
    JEL: I1 J32
    Date: 2006–06
  5. By: Martin Feldstein
    Abstract: A desirable system for providing and financing health care would achieve three goals: (1) preventing the deprivation of care because of a patient's inability to pay; (2) avoiding wasteful spending; and (3) allowing care to reflect the different tastes of individual patients. Although it is not possible to realize fully all three of these goals, they can condition and inform the design of a good system for financing health care. This paper discusses the application of these goals in more detail and use them to consider a reform of the system of Health Savings Accounts that was enacted as part of the 2003 Medicare legislation and, separately, the challenge posed by the very expensive treatments for rare diseases that are becoming more common.
    JEL: I1 H2
    Date: 2006–06
  6. By: Hanming Fang; Michael P. Keane; Dan Silverman
    Abstract: We provide strong evidence of advantageous selection in the Medigap insurance market, and analyze its sources. Using Medicare Current Beneficiary Survey (MCBS) data, we find that, conditional on controls for the price of Medigap, medical expenditures for senior citizens with Medigap coverage are, on average, about $4,000 less than for those without. But, if we condition on health, expenditures for seniors on Medigap are about $2,000 more. These two findings can only be reconciled if those with less health expenditure risk are more likely to purchase Medigap, implying advantageous selection. By combining the MCBS and the Health and Retirement Study (HRS), we investigate the sources of this advantageous selection. These include income, education, longevity expectations and financial planing horizons, as well as cognitive ability. Once we condition on all these factors, seniors with higher expected medical expenditure are indeed more likely to purchase Medigap. Surprisingly, risk preferences do not appear to be a source of advantageous selection. But cognitive ability emerges as a particularly important factor, consistent with a view that many senior citizens have difficulty understanding Medicare and Medigap rules.
    JEL: D82 G22 I11
    Date: 2006–06
  7. By: John Cawley; Richard V. Burkhauser
    Abstract: Virtually all social science research related to obesity uses body mass index (BMI), usually calculated using self-reported values of weight and height, or clinical weight classifications based on BMI. Yet there is wide agreement in the medical literature that such measures are seriously flawed because they do not distinguish fat from fat-free mass such as muscle and bone. Here we evaluate more accurate measures of fatness (total body fat, percent body fat, and waist circumference) that have greater theoretical support in the medical literature. We provide conversion formulas based on NHANES data so that researchers can calculate the estimated values of these more accurate measures of fatness using the self-reported weight and height available in many social science datasets. To demonstrate the benefits of these alternative measures of fatness, we show that using them significantly impacts who is classified as obese. For example, when the more accurate measures of fatness are used, the gap in obesity between white and African American men increases substantially, with white men significantly more likely to be obese. In addition, the gap in obesity between African American and white women is cut in half (with African American women still significantly more likely to be obese). As an example of the value of fatness in predicting social science outcomes, we show that while BMI is positively correlated with the probability of employment disability in the PSID, when body mass is divided into its components, fatness is positively correlated with disability while fat-free mass (such as muscle) is negatively correlated with disability.
    JEL: I2 J2
    Date: 2006–06
  8. By: Sara Markowitz; John Tauras
    Abstract: This paper is about the spending choices of youth, with a particular focus on how the demand for cigarettes, alcohol and marijuana are influenced by changes in the prices of other products. Youth tend to have small incomes and limited wants, with the result that many students spend the bulk of their income on only a few items. Fast food, clothing and entertainment make up the majority of products purchased by teenagers. The hypothesis to be tested in this project is that changes in the prices of the other goods commonly bought by teenagers will affect budget allocations and thereby affect the demand for substances. We estimate own and cross price effects using the prices of cigarettes, alcohol, marijuana and other consumer products including gasoline, clothing, entertainment, and fast food. Income effects are also estimated and show that teens with higher incomes and allowances are more likely to use substances. The policy implications of the results are discussed.
    JEL: I0 D0
    Date: 2006–06
  9. By: Sergi Jiménez-Martín; José M. Labeaga; Cristina Villaplana Prieto
    Abstract: There is a controversial debate about the effects of permanent disability benefits on labor market behavior. In this paper we estimate equations for deserving and receiving disability benefits to evaluate the award error as the difference in the probability of receiving and deserving using survey data from Spain. Our results indicate that individuals aged between 55 and 59, self-employers or working in an agricultural sector have a probability of receiving a benefit without deserving it significantly higher than the rest of individuals. We also find evidence of gender discrimination since male have a significantly higher probability of receiving a benefit without deserving it. This seems to confirm that disability benefits are being used as an instrument for exiting the labor market for some individuals approaching the early retirement or those who do not have right to retire early. Taking into account that awarding process depends on Social Security Provincial Department, this means that some departments are applying loosely the disability requirements for granting disability benefits.
    Keywords: Disability benefits, Award error, Early retirement, Social security
    JEL: H55 J26
    Date: 2006–05
  10. By: Steven Stillman (Motu Economic and Public Policy Research); David McKenzie (Development Research Group, The World Bank); John Gibson (University of Waikato)
    Abstract: People migrate to improve their well-being, whether through an expansion of economic and social opportunities or a reduction in persecution. Yet a large literature suggests that migration can be a very stressful process, with potentially negative impacts on mental health reducing the net benefits of migration. However, to truly understand the effect of migration on mental health one must compare the mental health of migrants to what their mental health would have been had they stayed in their home country. The existing literature is not able to do this and typically settles for comparing the mental health of migrants to that of natives in the destination country,which takes no account of any pre-existing differences between these groups. This paper overcomes the selection problems affecting previous studies of the effect of migration on mental health by examining a migrant lottery program. New Zealand allows a quota of Tongans to immigrate each year with a lottery used to choose amongst the excess number of applicants. A unique survey conducted by the authors in these two countries allows experimental estimates of the mental health effects of migration to be obtained by comparing the mental health of migrants who were successful applicants in the lottery to the mental health of those who applied to migrate under the quota, but whose names were not drawn in the lottery. Migration is found to lead to improvements in mental health, particularly for women and those with poor mental health in their home country.
    Keywords: migration; mental health; natural experiment
    JEL: F22 I12 J61
    Date: 2006–03–31
  11. By: Gash, Vanessa; Mertens, Antje; Romeu Gordo, Laura (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "In this paper we analyse the health effects of fixed-term contract status for men and women in West-Germany and Spain using panel data. This paper asks whether changes in the employment relationship, as a result of the liberalisation of employment law, have altered the positive health effects associated with employment (Goldsmith et al. 1996; Jahoda 1982). Using information on switches between unemployment and employment by contract type we analyze whether transitions to different contracts have different health effects. We find that unemployed workers show positive health effects at job acquisition, and also find the positive effect to be smaller for workers who obtain a fixed-term job. We also establish surprising differences by gender and country, with women less likely to report positive health effects at job acquisition. For West-Germany, this was found to be a function of the dual-burden of paid and unpaid care within the home." (author's abstract, IAB-Doku) ((en))
    Keywords: befristeter Arbeitsvertrag - Auswirkungen, Gesundheitszustand - internationaler Vergleich, Arbeitnehmer, geschlechtsspezifische Faktoren, Arbeitslose, Sozioökonomisches Panel, Europäisches Haushaltspanel, psychische Faktoren, Unsicherheit, Westdeutschland, Spanien, Bundesrepublik Deutschland
    JEL: J41 J64 I10
    Date: 2006–05–11
  12. By: Romeu Gordo, Laura (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "This paper tests whether there is evidence of compression of morbidity using data from the American Health and Retirement Study and analyzes the effects of this on the labor supply of older people. We find younger cohorts to suffer less from functional problems than older cohorts at given ages. Furthermore, we observe that instrumentalized disability has a negative effect on labor force participation. According to the cohort analysis and the multivariate analysis, it can be concluded that individuals will be able to work longer because of the delay in the onset of disability problems." (author's abstract, IAB-Doku) ((en))
    Keywords: Lebenserwartung, ältere Menschen, alte Menschen, Gesundheitszustand, Krankheit, chronische Krankheit, Behinderung, Erwerbsbeteiligung, Lebensarbeitszeit, USA
    JEL: J14 J21 I12
    Date: 2006–05–18

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