nep-hea New Economics Papers
on Health Economics
Issue of 2011‒06‒04
seven papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Economic Effects of Health Care Reform on Virginia By Terance J. Rephann
  2. An OLG model of growth with longevity: when grandparents take care of grandchildren By Fanti, Luciano; Gori, Luca
  3. Life and Growth By Charles I. Jones
  4. Childhood Health and Differences in Late-Life Health Outcomes Between England and the United States By James Banks; Zoe Oldfield; James P. Smith
  5. Peer Effects and Multiple Equilibria in the Risky Behavior of Friends By David Card; Laura Giuliano
  6. The Economics of Risky Health Behaviors By John Cawley; Christopher Ruhm
  7. Involuntary Non-Regular Workers in Japan and Their Mental Health (Japanese) By YAMAMOTO Isamu

  1. By: Terance J. Rephann (Center for Economic and Policy Studies)
    Abstract: This study estimates the impact of the 2010 health care reform law (the Patient Protection and Affordable Care Act/Health Care and Education Reconciliation Act) on Virginia’s economy. Health care reform is a complex and multifaceted law that was enacted with the joint goals of improving health insurance coverage for U.S. residents, decreasing the costs of health care, and improving overall health care delivery and quality. Although it was enacted for these purposes, the law also involves large changes in tax policy and government and private expenditures that can be expected to have significant direct and indirect economic effects. The study uses an industry-standard regional economic impact tool, REMI PI+ (Regional Economic Models, Inc. Policy Insight Plus), and data from the Congressional Budget Office, Joint Committee on Taxation, Virginia Department of Medical Assistance and other sources to estimate these effects. Results indicate that health care reform has positive employment effects for Virginia.
    Keywords: health, reform, regional
    JEL: R00 I18
    Date: 2011–02–21
  2. By: Fanti, Luciano; Gori, Luca
    Abstract: By assuming that grandparents take care of grandchildren, in this paper we aim at studying the effects of longevity on economic growth in the basic OLG model with endogenous fertility. We show that a rise in longevity can actually reduce long-run growth. Moreover, we also find that an increasing longevity (i) increases the supply of labour by the young parents, and (ii) causes fertility either to increase of decrease depending on the size of the grandparental child rearing time.
    Keywords: Longevity; OLG model
    JEL: J13 O41 J22
    Date: 2011–05–28
  3. By: Charles I. Jones
    Abstract: Some technologies save lives — new vaccines, new surgical techniques, safer highways. Others threaten lives — pollution, nuclear accidents, global warming, the rapid global transmission of disease, and bioengineered viruses. How is growth theory altered when technologies involve life and death instead of just higher consumption? This paper shows that taking life into account has first-order consequences. Under standard preferences, the value of life may rise faster than consumption, leading society to value safety over consumption growth. As a result, the optimal rate of consumption growth may be substantially lower than what is feasible, in some cases falling all the way to zero.
    JEL: E0 I10 O3 O4
    Date: 2011–05
  4. By: James Banks; Zoe Oldfield; James P. Smith
    Abstract: In this paper we examine the link between retrospectively reported measures of childhood health and the prevalence of various major and minor diseases at older ages. Our analysis is based on comparable retrospective questionnaires placed in the Health and Retirement Study and the English Longitudinal Study of Ageing – nationally representative surveys of the age 50 plus population in America and England respectively. We show that the origins of poorer adult health among older Americans compared to the English trace right back into the childhood years – the American middle and old-age population report higher rates of specific childhood health conditions than their English counterparts. The transmission into poor health in mid life and older ages of these higher rates of childhood illnesses also appears to be higher in America compared to England. Both factors contribute to higher rates of adult illness in the United States compared to England although even in combination they do not explain the full extent of the country difference in late-life health outcomes.
    JEL: I10
    Date: 2011–05
  5. By: David Card; Laura Giuliano
    Abstract: We study social interactions in the risky behavior of best-friend pairs in the National Longitudinal Study of Adolescent Health (Add Health). Focusing on friends who had not yet initiated a particular behavior (sex, smoking, marijuana use, truancy) by the first wave of the survey, we estimate bivariate discrete choice models for their subsequent decisions that include peer effects and unobserved heterogeneity. Social interactions can lead to multiple equilibria in friends’ choices: we consider simple equilibrium selection models as well as partial likelihood models that remain agnostic about the choice of equilibrium. Our identification strategy assumes that there is at least one individual characteristic (e.g., physical development) that does not directly affect a friend’s propensity to engage in a risky activity. Our estimates suggest that patterns of initiation of risky behavior by adolescent friends exhibit significant interaction effects. The likelihood that one friend initiates intercourse within a year of the baseline interview increases by 4 percentage points (on a base of 14%) if the other also initiates intercourse, holding constant family and individual factors. Similar effects are also present for smoking, marijuana use, and truancy. We find larger peer effects for females and for pairs that are more likely to remain best friends after a year. We also find important asymmetries in the strength of the peer effects in non-reciprocated friendships.
    JEL: J13
    Date: 2011–05
  6. By: John Cawley; Christopher Ruhm
    Abstract: Risky health behaviors such as smoking, drinking alcohol, drug use, unprotected sex, and poor diets and sedentary lifestyles (leading to obesity) are a major source of preventable deaths. This chapter overviews the theoretical frameworks for, and empirical evidence on, the economics of risky health behaviors. It describes traditional economic approaches emphasizing utility maximization that, under certain assumptions, result in Pareto-optimal outcomes and a limited role for policy interventions. It also details nontraditional models (e.g. involving hyperbolic time discounting or bounded rationality) that even without market imperfections can result in suboptimal outcomes for which government intervention has greater potential to increase social welfare. The chapter summarizes the literature on the consequences of risky health behaviors for economic outcomes such as medical care costs, educational attainment, employment, wages, and crime. It also reviews the research on policies and strategies with the potential to modify risky health behaviors, such as taxes or subsidies, cash incentives, restrictions on purchase and use, providing information and restricting advertising. The chapter concludes with suggestions for future research.
    JEL: D01 D1 D6 D83 D87 H2 I1 I18 I20 J1 Q18
    Date: 2011–05
  7. By: YAMAMOTO Isamu
    Abstract: Using Japanese longitudinal data from the Keio Household Panel Survey 2004-2010, this paper focuses on those who work involuntarily as non-regular workers because they could not secure jobs as regular employees. Our findings are as follows: First, the majority of non-regular workers are categorized as voluntary although the number of involuntary non-regular workers is not negligible—about 1.5 times more than that of the unemployed. Second, more involuntary non-regular workers are found among non-married workers, those in their 20s or 40-50s, contract and temporary agency workers, transport and machine-operation workers, or manufacturing process workers. Third, judging from the selection and transition behavior among labor force status, involuntary non-regular workers have more similarity with unemployed persons and less similarity with voluntary non-regular workers. Fourth, the measured mental health index indicates that the stress levels of non-regular workers, unemployed persons, and non-workers are higher than that of regular employees. After controlling for individual heterogeneity and endogeneity of the labor force status, however, only involuntary non-regular workers and unemployed persons show to have higher stress levels than regular employees. It is interpreted that involuntary non-regular workers as well as unemployed persons are worse off due to the demand-side constraints, and they are therefore likely to face mental health illness compared with regular employees or voluntary non-regular workers.
    Date: 2011–04

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