nep-hea New Economics Papers
on Health Economics
Issue of 2009‒08‒22
eighteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Does Leaving Welfare Improve Health? Evidence for Germany By Huber, Martin; Lechner, Michael; Wunsch, Conny
  2. Smoking Persistence Across Countries: An Analysis Using Semi-Parametric Dynamic Panel Data Models with Selectivity By Christelis, Dimitris; Sanz-de-Galdeano, Anna
  3. Health Inequality over the Life-Cycle By Halliday, Timothy
  4. Gradients of the Intergenerational Transmission of Health in Developing Countries By Bhalotra, Sonia R.; Rawlings, Samantha
  5. International Differences in Longevity and Health and Their Economic Consequences By Michaud, Pierre-Carl; Goldman, Dana P.; Lakdawalla, Darius N.; Zheng, Yuhui; Gailey, Adam H.
  6. Understanding the Economic Consequences of Shifting Trends in Population Health By Michaud, Pierre-Carl; Goldman, Dana P.; Lakdawalla, Darius N.; Zheng, Yuhui; Gailey, Adam H.
  7. Health Status and the Allocation of Time By Halliday, Timothy; Podor, Melinda
  8. The Public Health Costs of Job Loss By Kuhn, Andreas; Lalive, Rafael; Zweimüller, Josef
  9. Health Insurance Coverage Estimates for Iowa By Eathington, Liesl
  10. Price and welfare effects of a pharmaceutical substitution reform By Granlund, David
  11. Morbidity Patterns In Kerala: Levels and Determinants By Navaneetham K
  12. The Convergence of Health Care Financing Structures: Empirical Evidence from OECD-Countries By Andrea Leiter; Engelbert Theurl
  13. "From Unpaid to Paid Care Work--The Macroeconomic Implications of HIV and AIDS on Women's Time-tax Burdens" By Rania Antonopoulos; Taun N. Toay
  14. Health and anthropometric features as determinants of annual income in Norway By Ivar Pettersen
  15. Neighbourhood social capital and individual mental health By Tampubolon, Gindo
  16. Disease, Institutions and Underdevelopment By Hasan, Lubna
  17. Variance in Death and Its Implications for Modeling and Forecasting Mortality By Shripad Tuljapurkar; Ryan D. Edwards
  18. Aging, religion, and health By Angus S. Deaton

  1. By: Huber, Martin (University of St. Gallen); Lechner, Michael (University of St. Gallen); Wunsch, Conny (University of St. Gallen)
    Abstract: Using exceptionally rich linked administrative and survey information on German welfare recipients we investigate the health effects of transitions from welfare to employment and of assignments to welfare-to-work programmes. Applying semi-parametric propensity score matching estimators we find that employment substantially increases (mental) health. The positive effects are mainly driven by males and individuals with bad initial health conditions and are largest for males with poor health. In contrast, the effects of welfare-to-work programmes, including subsidized jobs, are ambiguous and statistically insignificant for most outcomes. Robustness checks that include a semi-parametric instrumental variable approach do not provide reasons for concern.
    Keywords: welfare programs, health effects
    JEL: I38 J68 I10
    Date: 2009–08
  2. By: Christelis, Dimitris (University of Naples, Federico II); Sanz-de-Galdeano, Anna (Universitat Autònoma de Barcelona)
    Abstract: We study smoking persistence in ten countries using data from the European Community Household Panel. Such persistence may be due to true state dependence but may also reflect individual unobserved heterogeneity. We distinguish between the two by using semi-parametric dynamic panel data methods applied to both the decision to smoke or not and to the decision on the number of cigarettes smoked. Our model allows for correlation of the two time-varying error terms, i.e. for selectivity. We find that for both smoking decisions true state dependence is in general much smaller when unobserved individual heterogeneity is taken into account, and we also uncover large differences in true state dependence across countries. Finally, we find that taking into account heaping in the reported number of cigarettes smoked considerably improves the fit of our model.
    Keywords: smoking, panel data, selectivity
    JEL: C33 C34 D12 I10 I12
    Date: 2009–07
  3. By: Halliday, Timothy (University of Hawaii at Manoa)
    Abstract: We investigate the evolution of health inequality over the life-course. Health is modeled as a latent variable that is determined by three factors: endowments, and permanent and transitory shocks. We employ Simulated Minimum Distance and the Panel Study of Income Dynamics to estimate the model. We estimate that permanent shocks account for under 10% of the total variation in health for the college educated, but between 35% and 70% of total health variability for people without college degrees. Consistent with this, we find that health inequality moves substantially more slowly over the life-course for the college educated.
    Keywords: health, dynamic panel data models, variance decomposition
    JEL: I1 C5
    Date: 2009–08
  4. By: Bhalotra, Sonia R. (University of Bristol); Rawlings, Samantha (University of Bristol)
    Abstract: This paper investigates the sensitivity of the intergenerational transmission of health to exogenous changes in income, education and public health, changes that are often delivered by economic growth. It uses individual survey data on 2.24 million children born to 600000 mothers during 1970-2000 in 38 developing countries. These data are merged with macroeconomic data by country and birth cohort to create an unprecedentedly large sample of comparable data that exhibit massive variation in maternal and child health as well as in aggregate economic conditions. The country-level panel is exploited to control for aggregate shocks and trends in unobservables within countries, while a panel of children within mother is exploited to control for family-specific endowments and neighbourhood characteristics. Child health is indicated by infant survival and maternal health by (relative) height. We find that improvements in maternal education, income and public health provision that occur in the year of birth and the year before birth limit the degree to which child health is tied to family circumstance. The interaction (gradient) effects are, in general, most marked for shorter women suggesting that children are more likely to bear the penalty exerted by poor maternal health if they are conceived or born in adverse socio-economic conditions.
    Keywords: intergenerational transmission, early life conditions, health, infant mortality, height, growth, income, education, public health, gene, environment, in utero
    JEL: O12 I12
    Date: 2009–08
  5. By: Michaud, Pierre-Carl (RAND); Goldman, Dana P. (RAND); Lakdawalla, Darius N. (RAND); Zheng, Yuhui (RAND); Gailey, Adam H. (RAND)
    Abstract: In 1975, 50 year-old Americans could expect to live slightly longer than their European counterparts. By 2005, American life expectancy at that age has diverged substantially compared to Europe. We find that this growing longevity gap is primarily the symptom of real declines in the health of near-elderly Americans, relative to their European peers. In particular, we use a microsimulation approach to project what US longevity would look like, if US health trends approximated those in Europe. We find that differences in health can explain most of the growing gap in remaining life expectancy. In addition, we quantify the public finance consequences of this deterioration in health. The model predicts that gradually moving American cohorts to the health status enjoyed by Europeans could save up to $1.1 trillion in discounted total health expenditures from 2004 to 2050.
    Keywords: disability, mortality, international comparisons, microsimulation
    JEL: I10 I38 J26
    Date: 2009–08
  6. By: Michaud, Pierre-Carl (RAND); Goldman, Dana P. (RAND); Lakdawalla, Darius N. (RAND); Zheng, Yuhui (RAND); Gailey, Adam H. (RAND)
    Abstract: The public economic burden of shifting trends in population health remains uncertain. Sustained increases in obesity, diabetes, and other diseases could reduce life expectancy − with a concomitant decrease in the public-sector's annuity burden − but these savings may be offset by worsening functional status, which increases health care spending, reduces labor supply, and increases public assistance. Using a microsimulation approach, we quantify the competing public-finance consequences of shifting trends in population health for medical care costs, labor supply, earnings, wealth, tax revenues, and government expenditures (including Social Security and income assistance). Together, the reduction in smoking and the rise in obesity have increased net public-sector liabilities by $430bn, or approximately 4% of the current debt burden. Larger effects are observed for specific public programs: annual spending is 10% higher in the Medicaid program, and 7% higher for Medicare.
    Keywords: disability, health care costs, social security, microsimulation
    JEL: I10 I38 J26
    Date: 2009–08
  7. By: Halliday, Timothy (University of Hawaii at Manoa); Podor, Melinda (University of Hawaii at Manoa)
    Abstract: In this paper, we quantify the effects of health on time allocation. We estimate that improvements in health status have large and positive effects on time allocated to home and market production and large negative effects on time spent watching TV, sleeping, and consuming other types of leisure. We find that poor health status results in about 300 additional hours allocated to unproductive activities per year. Plausible estimates of the cost of this lost time exceed $10,000. We also find that, for men, better health induces a substitution of market-produced goods for home-produced goods. Particularly, each additional minute spent in home production saves $0.37.
    Keywords: labor supply, time allocation, health
    JEL: I1 J2
    Date: 2009–08
  8. By: Kuhn, Andreas (University of Zurich); Lalive, Rafael (University of Lausanne); Zweimüller, Josef (University of Zurich)
    Abstract: We study the short-run effect of involuntary job loss on comprehensive measures of public health costs. We focus on job loss induced by plant closure, thereby addressing the reverse causality problem of deteriorating health leading to job loss as job displacements due to plant closure are unlikely caused by workers' health status, but potentially have important effects on individual workers' health and associated public health costs. Our empirical analysis is based on a rich data set from Austria providing comprehensive information on various types of health care costs and day-by-day work history at the individual level. Our central findings are: (i) overall expenditures on medical treatments (hospitalizations, drug prescriptions, doctor visits) are not strongly affected by job displacement; (ii) job loss increases expenditures for antidepressants and related drugs, as well as for hospitalizations due to mental health problems for men (but not for women); and (iii) sickness benefits strongly increase due to job loss.
    Keywords: social cost of unemployment, health, job loss, plant closure
    JEL: I12 I19 J28 J65
    Date: 2009–08
  9. By: Eathington, Liesl
    Abstract: This report describes characteristics of the population without health insurance in Iowa, including estimates by age, income level, race and ethnicity, and county of residence.
    JEL: I1 J1 R0
    Date: 2009–08–14
  10. By: Granlund, David (Department of Economics, Umeå University)
    Abstract: The price effects of the Swedish pharmaceutical substitution reform are analyzed using data for a panel of all pharmaceutical product sold in Sweden in 1997—2007. The price reduction due to the reform was estimated to average 10% and was found to be significantly larger for brand name pharmaceuticals than for generics. The results also imply that the reform amplified the effect of generic entry has on brand-name prices by a factor of ten. Results of a demand-estimation imply that the price reductions increased total pharmaceutical consumption by 8% and consumer welfare by SEK 2.7 billion annually.
    Keywords: drugs; generic competition; equivalent variation; demand estimation
    JEL: D40 I11 L65
    Date: 2009–08–13
  11. By: Navaneetham K
    Abstract: This paper examines the levels, patterns, and determinants of morbidity in Kerala. This study is based on a community survey conducted in 2004, in three districts of the state namely Thiruvananthapuram, Malappuram and Kannur. The survey covers 3320 households having 17071 individuals in all age groups. Reported morbidity was captured for a period of fifteen days prior to the data of survey. Life course analysis was performed to understand the risk of morbidity at various stages, like infancy, early childhood, late childhood, adolescence, reproductive ages and old age, in relation to the impact of socio-economic, demographic and regional factors. [WP No. 411].
    Keywords: morbidity, kerala, reproductive ages, adolescence, reporductive, community survey, state,Thiruvananthapuram, Malappuram, households, age groups, age, survey, data, old age, socio-economic, demographic, regional factors, life, life course analysis, childhood, Kannur
    Date: 2009
  12. By: Andrea Leiter (Department of Economics and Statistics, University of Innsbruck, Austria); Engelbert Theurl (Department of Economics and Statistics, University of Innsbruck, Austria)
    Abstract: In this paper we concentrate on the question whether the financing structure of the health care systems converges. In a world of increasing economic integration convergence in health care financing (HCF) and, hence, decreasing differences in HCF across countries enhance individuals’ (labour) mobility and support harmonization processes. As an indicator for convergence we take the public financing ratio in % of total HCF and in % of GDP. The major finding is that HCF in the OECD countries converged in the time period 1970 – 2005. This conlusion also holds when looking at smaller sub groups of countries and shorter time periods. However, we find evidence that countries do not move towards a common mean and that the rate of convergence is decreasing over time.
    Keywords: Convergence, health care system, health care financing
    JEL: I11 I18 H55
    Date: 2009–08
  13. By: Rania Antonopoulos; Taun N. Toay
    Abstract: This paper considers public employment guarantee programs in the context of South Africa as a means to address the nexus of poverty, unemployment, and unpaid work burdens--all factors exacerbated by HIV/AIDS. It further discusses the need for genderinformed public job creation in areas that mitigate the "time-tax" burdens of women, and examines a South African initiative to address social sector service delivery deficits within the government's Expanded Public Works Programme. The authors highlight the need for well-designed employment guarantee programs--specifically, programs centered on community and home-based care--as a potential way to help offset the destabilizing effects of HIV/AIDS and endemic poverty. The paper concludes with results from macroeconomic simulations of such a program, using a social accounting matrix framework, and sets out implications for both participants and policymakers.
    Date: 2009–08
  14. By: Ivar Pettersen (Department of Economics, Norwegian University of Science and Technology)
    Abstract: Health is linked to income in various ways. In this study we try to quantify the effects of differences in health and appearances on annual income. Starting with a classical Mincer-equation for income we include health and anthropometric characteristics in order to assess the hypothesis. We also decompose the income-differentials using Oaxaca-Blinder- decomposition. Using data from the North-Trøndelag health survey we have a wide range of self-reported health-indicators as well as objective measures of anthropometric features. Different health-proxies, both somatic and mental, obesity and height are all significant factors for income using a sample of full-time employed individuals, but the effects are driven mainly by selection into employment. Taking both selection bias and potential endogeneity into account the effects of health on income are weak at best. Altogether the results do not indicate that variations in health are important to observed income-differences in Norway.
    Date: 2009–08–12
  15. By: Tampubolon, Gindo
    Abstract: Neighbourhood social capital is often claimed benecial for health, yet evidence of this contextual eect in the UK has been thin. To examine this eect, I draw upon Grossman health production model and Blume-Brock-Durlauf social interaction model underpinning the effects of neighbourhood social capital on individual health. This study uses two most recent independent surveys on neighbourhood social capital and on individual mental health in Wales. Both are linked based on neighbourhood. I nd that many forms of neighbourhood social capital, measured with widely used questions, improve resident's mental health (SF36). Public health practitioners have these measures as additional tools to draw upon in formulating public health policy.
    Keywords: social capital; SF36; quality of life
    JEL: I12 I18 Z13
    Date: 2009–08–13
  16. By: Hasan, Lubna
    Abstract: What explains poverty of Sub Saharan Africa and South Asia? One view holds the disease environment of these regions as the primary culprit. Others see it as a typical symptom of growth retarding institutions. We test validity of these competing assertions for a cross section of countries. Our results indicate that institutions are the prime determinant of economic performance of countries. Disease does not play a significant role in determining outcomes. On the contrary, we find support for the indirect effect of disease via institutions, as asserted by the 'institutions school'. Interestingly, the 'institutions school' contention about geography having no direct effect on income is also not validated. Our results show that being land locked can pose significant disadvantage for a country. Endowment of hydrocarbon, however, is beneficial for economic outcomes.
    Keywords: Economic Performance; Institutions; Disease
    JEL: O43 I10
    Date: 2009–08–19
  17. By: Shripad Tuljapurkar; Ryan D. Edwards
    Abstract: Entropy, or the gradual decline through age in the survivorship function, reflects the considerable amount of variance in length of life found in any human population. Part is due to the well-known variation in life expectancy between groups: large differences according to race, sex, socioeconomic status, or other covariates. But within-group variance is very large even in narrowly defined groups, and it varies strongly and inversely with the group average length of life. We show that variance in length of life is inversely related to the Gompertz slope of log mortality through age, and we reveal its relationship to variance in a multiplicative frailty index. Our findings bear a variety of implications for modeling and forecasting mortality. In particular, we examine how the assumption of proportional hazards fails to account adequately for differences in subgroup variance, and we discuss how several common forecasting models treat the variance along the temporal dimension.
    JEL: I1 J11 N3
    Date: 2009–08
  18. By: Angus S. Deaton
    Abstract: Durkheim’s famous study of suicide is a precursor of a large contemporary literature that investigates the links between religion and health. The topic is particularly germane for the health of women and of the elderly, who are much more likely to be religious. In this paper, I use data from the Gallup World Poll to study the within and between country relationships between religiosity, age, and gender, as well as the effects of religiosity on a range of health measures and health-related behaviors. The main contribution of the current study comes from the coverage and richness of the data, which allow me to use nationally representative samples to study the correlates of religion within and between more than 140 countries using more than 300,000 observations. It is almost universally true that the elderly and women are more religious, and I find evidence in favor of a genuine aging effect, not simply a cohort effect associated with secularization. As in previous studies, it is not clear why women are so much more religious than men. In most countries, religious people report better health; they say they have more energy, that their health is better, and that they experience less pain. Their social lives and personal behaviors are also healthier; they are more likely to be married, to have supportive friends, they are more likely to report being treated with respect, they have greater confidence in the healthcare and medical system and they are less likely to smoke. But these effects do not all hold in all countries, and they tend to be stronger for men than for women.
    JEL: I10 Z12
    Date: 2009–08

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