nep-hea New Economics Papers
on Health Economics
Issue of 2011‒10‒09
fifteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Average age at death in infancy and infant mortality level: reconsidering the Coale-Demeny formulas at current levels of low mortality By Evgueni M. Andreev; Ward Kingkade
  2. Multidimensional Poverty in Kenya: Analysis of Maternal and Child Wellbeing By Jane Kabubo-Mariara; Anthony Wambugu; Susan Musau
  3. What Effect Does Female Autonomy Have on Child Health? Microeconometric Evidence from Rural India By Kazuya Wada
  4. The diffusion of health technologies: Cultural and biological divergence By Hansen, Casper Worm
  5. Reforming Austria's Highly Regarded but Costly Health System By Rauf Gönenç; Maria M. Hofmarcher; Andreas Wörgötter
  6. A Few Special Cases: Scientific Creativity and Network Dynamics in the Field of Rare Diseases By Massimo Riccaboni; Maria Laura Frigotto
  7. Who gets a mammogram amongst European women aged 50-69 years and why are there such large differences across European countries? By Wübker, Ansgar
  8. Childhood lead and academic performance in Massachusetts By Jessica W. Reyes
  9. Firms’ moral hazard in sickness absences By René Böheim; Thomas Leoni
  10. Natural Experiment Evidence on the Effect of Migration on Blood Pressure and Hypertension By John Gibson; Steven Stillman; David McKenzie; Halahingano Rohorua
  11. Health, growth and welfare: a theoritical appraisal of the long run impact of medical R&D By Bosi, Stefano; Laurent, Thierry
  12. Structural social capital and health in Italy By Damiano Fiorillo; Fabio Sabatini
  13. Quality and quantity: The role of social interactions in individual health By Damiano Fiorillo; Fabio Sabatini
  14. Sinking, Swimming, or Learning to Swim in Medicare Part D By Ketcham, Jonathan D.; Lucarelli, Claudio; Miravete, Eugenio J; Roebuck, M Christopher
  15. Human Capital and Organizational Performance: Evidence from the Healthcare Sector By Ann P. Bartel; Ciaran S. Phibbs; Nancy Beaulieu; Patricia Stone

  1. By: Evgueni M. Andreev (Max Planck Institute for Demographic Research, Rostock, Germany); Ward Kingkade
    Abstract: The longterm historical decline in infant mortality has been accompanied by increasing concentration of infant deaths at the earliest stages of infancy. The influence of prenatal and neonatal conditions has become increasingly dominant relative to postnatal conditions as external causes of death such as infectious disease have been diminished. In the mid-1960s Coale and Demeny developed formulas describing the dependency of the average age of death in infancy on the level of infant mortality. Almost at the same time as Coale and Demeny’s analysis, as shown in this paper, in the more developed countries a steady rise in average age of infant death began. This paper demonstrates this phenomenon with several different data sources, including the linked individual birth and infant death datasets available from the US National Center for Health Statistics and the Human Mortality Database. A possible explanation for the increase in average age of death in infancy is proposed, and modifications of the Coale-Demeny formulas for practical application to contemporary low levels of mortality are offered.
    JEL: J1 Z0
    Date: 2011–09
  2. By: Jane Kabubo-Mariara; Anthony Wambugu; Susan Musau
    Abstract: This paper generates multidimensional poverty profiles for women and children over a ten-year period from 1993 to 2003.Data from the national Demographic and Health Survey are used to improve measurement of poverty in Kenya in four ways: First, the paper constructs a composite wealth index (CWI). Second, it applies the Alkire and Foster (2007) approach to the measurement of multidimensional poverty based on the CWI and health status. Third, stochastic dominance approaches are used to make poverty orderings across groups. Fourth, the probability of being poor in assets, health or both is explored using a bivariate probit model. The results show that the distribution of poor women and children differs across groups, space and time. We also find that the CWI and residence in a rural area respectively contribute more to multidimensional poverty than health and residence in an urban area. The results further suggest that understanding the correlates of wellbeing in a multidimensional context can generate policy insights for improving human capital investments.
    Keywords: Multidimensional poverty, composite wealth indicator, child health, stochastic dominance, Kenya
    JEL: C43 D31 I31 I32
    Date: 2011
  3. By: Kazuya Wada
    Abstract: This study investigates the effects of an improvement in female autonomy on children's welfare in the developing world, taking into consideration intra-household resource allocation through decision-making processes within households. Using a female autonomy index constructed from India's 1998/99 National Family Health Survey, the study tries to capture women's bargaining power and examine the effects on children's health and medical condition. The results of the empirical analysis suggest that often, though not always, children's health and medical condition can be enhanced by improving female autonomy. In addition, the results also imply that fostering female autonomy may play a crucial role in achieving economic development from a long-term perspective.
    Keywords: Female Autonomy, Intra-household Resource Allocation, Child Health
    JEL: D13 I12 J13
    Date: 2011–08
  4. By: Hansen, Casper Worm (Department of Business and Economics)
    Abstract: This paper proposes the hypothesis that genetic distance to the health frontier influences population health outcomes. Evidence from a world sample suggests that genetic distance - interpreted as long-term cultural and biological divergence - is an important factor in understanding health inequalities across countries. In particular, the paper documents a remarkably robust link between genetic distance and health as measured by life expectancy at birth and the adult survival rate. Also, the evidence reveals that the link has strengthened considerably over the 20th century which highlights the increasing effects of globalization on health conditions across countries through the transmission of health technologies.
    Keywords: Population health; international diffusion of health technologies; globalization; cultural and biological divergence
    JEL: I12 J10 N30 O11 O33
    Date: 2011–09–01
  5. By: Rauf Gönenç; Maria M. Hofmarcher; Andreas Wörgötter
    Abstract: The highly regarded Austrian health system delivers good quality and easily accessible services, but is costly. Its governance and funding structure is highly fragmented and it makes too much use of inpatient care in hospitals. Entry and competition opportunities are de facto limited in most health markets. The system operates therefore on a supply-driven basis, and does not have clear mechanisms to optimize spending on a cost-benefit basis. Population lifestyles are also not supportive of good health outcomes and suffer important differences between social groups, raising risks for the future. This Working Paper reviews Austrian authorities’ responses to these challenges, and makes recommendations based on OECD countries’ experiences. The suggested priorities are: i) more clearly assigning the performance, financing and spending responsibilities in the system, ii) enforcing a national capacity plan for publicly-funded inpatient and outpatient care, iii) introducing performance-based payment mechanisms in all services, iv) promoting the transition to “integrated care” by better balancing preventive, outpatient, inpatient, rehabilitation and long-term care, v) emphasizing healthier lifestyles and monitoring progress against national health goals (such as targets for obesity and overweight rates), and vi) better clarifying the medium-term fiscal outlook and scenarios of the system. This working paper is a slightly revised and completed version<P>Réformer le système de santé très apprécié mais coûteux de l'Autriche<BR>Le système de santé autrichien, très apprécié, qui dispense des soins de qualité et aisément accessibles, est néanmoins coûteux. Sa structure de gouvernance et de financement est très compartimentée et le recours à l’hospitalisation est excessif. L’entrée dans le secteur et la concurrence sont de facto limitées sur la plupart des marchés de la santé. Le système est donc régi par l’offre et ne dispose pas de mécanismes précis permettant d’optimiser la dépense selon un bon rapport coûts-avantages. Les modes de vie de la population ne favorisent pas non plus de bons résultats en matière de santé et il existe d’amples disparités entre les groupes sociaux, ce qui constitue un risque pour l’avenir. Le présent document de travail passe en revue les mesures prises par les autorités autrichiennes face à ces défis et formule des recommandations fondées sur l’expérience des pays de l'OCDE. Les priorités qu’il est proposé de retenir sont les suivantes : i) définir plus précisément les responsabilités respectives au sein du système en matière de performance, de financement et de dépenses ; ii) mettre en application un plan de capacités pour les soins hospitaliers et ambulatoires financés sur fonds publics, iii) mettre en place dans tous les services des mécanismes de rémunération en fonction de la performance, iv) favoriser la transition vers une « intégration des soins » en veillant à un meilleur équilibre entre soins préventifs, soins ambulatoires, soins hospitaliers, soins de réadaptation et soins de longue durée, v) promouvoir des modes de vie sains et suivre les progrès par rapport aux objectifs nationaux de santé (comme des repères de taux d’obésité et de surpoids), et vi) mieux définir les perspectives et les scénarios budgétaires à moyen terme qui se profilent pour le système. Ce document de travail est une version légèrement révisée et complétée du chapitre spécial de l'Etude économique de l'OCDE de l’Autriche 2011 (
    Keywords: public spending, Austria, efficiency, health care system, health institutions and policies, dépenses publiques, système de santé, Autriche, efficacité, institutions et politiques de santé
    JEL: H51 I11 I12 I18
    Date: 2011–09–29
  6. By: Massimo Riccaboni; Maria Laura Frigotto
    Abstract: We develop a model of scientific creativity and test it in the field of rare diseases. Our model is based on the results of an in-depth case study of the Rett syndrome. Archival analysis, bibliometric techniques and expert surveys are combined with network analysis to identify the most creative scientists. First, alternative measures of generative and combinatorial creativity are compared. Then, we generalize our results and present a stochastic model of socio-semantic network evolution. The model predictions are tested with multiple networks of rare disease specialties. We find that new scientific collaborations among experts in a field enhance combinatorial creativity. Instead, high entry rates of novices are negatively related to generative creativity. By extending the set of useful concepts, creative scientists gain in centrality. At the same time, by increasing their centrality in the scientific community, scientists can replicate and generalize their results, thus contributing to a scientific paradigm.
    JEL: C63 L14 L26 L65 O31 O33
    Date: 2011–03
  7. By: Wübker, Ansgar
    Abstract: On the basis of the Survey of Health, Ageing, and Retirement (SHARE), we analyse the determinants of who engages in mammography screening focusing on European women aged 50-69 years. A special emphasis is put on the measurement error of subjective life expectancy and on the measurement and impact of physician quality. Our main findings are that physician quality, better education, having a partner, younger age and better health are associated with higher rates of receipt. The impact of subjective life-expectancy on screening decision substantially increases after taking measurement error into account. In light of the enormous differences in mammography screening rates between the European countries that can be detected even if several individual characteristics are taken into account, we explore in a second step the causes of these screening differences using newly available data from the SHARELIFE. The results reveal that in countries with low screening rates (e.g. Denmark, Greece and Poland) many reasons (financial restrictions, time costs, access barriers, lack of information, not usual and low perceived benefits of screening) are significant predictors of not receiving a mammogram. In contrast in countries with high screening rates such as the Netherlands only beliefs regarding the benefits of mammograms (Not considered to be necessary) and the cause Not usual to get this type of care seem to be important screening barriers. --
    JEL: I11 I18
    Date: 2011
  8. By: Jessica W. Reyes
    Abstract: It is now widely accepted that childhood exposure to even low levels of lead can adversely affect neurodevelopment, behavior, and cognitive performance. Using individual-level data on childhood lead levels and test scores in Massachusetts, this paper investigates the link between lead levels in early childhood in the 1990s and student test scores in elementary school in the 2000s. Elevated levels of blood lead in early childhood are shown to adversely impact standardized test performance, even when controlling for community and school characteristics. Accordingly, public health policy that reduced childhood lead levels in the 1990s was responsible for modest but statistically significant improvements in test performance in the 2000s, with particular benefits for children in low-income communities.
    Keywords: Achievement tests
    Date: 2011
  9. By: René Böheim (Department of Economics, Johannes Kepler University Linz, Austria); Thomas Leoni (Österreichisches Institut für Wirtschaftsforschung (WIFO) (Austrian Institute of Economic Research))
    Abstract: Sick workers in many countries receive sick pay during their illness- related absences from the workplace. In several countries, the social security system insures firms against their workers’ sickness absences. However, this insurance may create moral hazard problems for firms, leading to the inefficient monitoring of absences or to an underinvestment in their prevention. In the present paper, we investigate firms’ moral hazard problems in sickness absences by analyzing a legislative change that took place in Austria in 2000. In September 2000, an insurance fund that refunded firms for the costs of their blue-collar workers’ sickness absences was abolished (firms did not receive a similar refund for their white-collar workers’ sickness absences). Before that time, small firms were fully refunded for the wage costs of blue- collar workers’ sickness absences. Large firms, by contrast, were refunded only 70% of the wages paid to sick blue-collar workers. Using a difference-in-differences-in-differences approach, we estimate the causal impact of refunding firms for their workers’ sickness absences. Our results indicate that the incidences of blue-collar workers’ sicknesses dropped by approximately 8% and sickness absences were almost 11% shorter following the removal of the refund. Several robustness checks confirm these results.
    Keywords: absenteeism, moral hazard, sickness insurance
    JEL: J22 I38
    Date: 2011–09
  10. By: John Gibson (University of Waikato and Motu Economic and Public Policy Research); Steven Stillman (Motu, University of Waikato, IZA and CReAM); David McKenzie (Development Research Group, World Bank, IZA and CReAM); Halahingano Rohorua (University of Waikato)
    Abstract: Over 200 million people live outside their country of birth and experience large gains in material well-being by moving to where wages are higher. But the effect of this migration on health is less clear and existing evidence is ambiguous because of the potential for selfselection bias. In this paper, we use a natural experiment, comparing successful and unsuccessful applicants to a migration lottery to experimentally estimate the impact of migration on measured blood pressure and hypertension. Hypertension is a leading global health problem, as well as being an important health measure that responds quickly to migration. We use various econometric estimators to form bounds on the treatment effects since there appears to be selective non-compliance in the natural experiment. Even with these bounds the results suggest significant and persistent increases in blood pressure and hypertension, which have implications for future health budgets given the recent worldwide increases in immigration.
    Keywords: Blood pressure, Hypertension, Lottery, Migration, Natural experiment
    JEL: C21 I12 J61
    Date: 2010–10
  11. By: Bosi, Stefano; Laurent, Thierry
    Abstract: This paper aims at providing a simple economic framework to address the question of the optimal share of investments in medical R&D in total public spending. In order to capture the long-run impact of tax-financed medical R&D on the growth rate, we develop an endogenous growth model in the spirit of Barro [1990]. The model focuses on the optimal sharing of public resources between consumption and (non-health) investment, medical R&D and other health expenditures. It emphasizes the key role played by the public health-related R&D in enhancing economic growth and welfare in the long run.
    Keywords: Public health ; Medical R&D; Public spending; Endogenous growth
    JEL: H51 I18 H23 O31
    Date: 2011–08–06
  12. By: Damiano Fiorillo; Fabio Sabatini (-)
    Abstract: This paper presents the first empirical assessment of the causal relationship between social capital and health in Italy. The analysis draws on the 2000 wave of the Multipurpose Survey on Household conducted by the Italian Institute of Statistics on a representative sample of the population (n = 50,618). Our measure of social capital is the frequency of meetings with friends. Based on probit and instrumental variables estimates, we find that higher levels of social capital increase perceived good health.
    Keywords: health, instrumental variables, income, social interactions, social capital.
    JEL: I12 I18 Z1
    Date: 2011–07–25
  13. By: Damiano Fiorillo; Fabio Sabatini (-)
    Abstract: The public health literature focusing on the detrimental effects of social isolation has shown that the quantity of social connections is positively correlated with individual health. Drawing on pooled cross-sectional data, we test this hypothesis on a representative sample of the Italian population. Our findings show that, besides the quantity of interactions, it is their quality – as measured by subjective satisfaction derived from relationships with friends – that works as the best predictor of health. We point out the existence of health disparities based on socio-economic status. Poorer and less educated individuals are exposed to a higher probability of reporting poor health conditions. The risk is even worse for unemployed and retired workers. This paper contributes to the literature in two substantive dimensions. This is the first empirical study of the relationship between social interactions and health in Italy. Second, we add to previous studies by carrying out the first assessment of the role of satisfaction in interpersonal relations.
    Keywords: health, well-being, satisfaction, social interactions, social capital, family, Italy.
    JEL: I12 I18 Z1
    Date: 2011–03–23
  14. By: Ketcham, Jonathan D.; Lucarelli, Claudio; Miravete, Eugenio J; Roebuck, M Christopher
    Abstract: Under Medicare Part D, senior citizens choose prescription drug insurance offred by numerous private insurers. We examine non-poor enrollees' actions in 2006 and 2007 using panel data. Our sample reduced overspending by $298 on average, with gains by 81% of them. The greatest improvements were by those who overspent most in 2006 and by those who switched plans. Decisions to switch depended on individuals' overspending in 2006 and on individual-specific effects of changes in their current plans. The oldest consumers and those initiating medications for Alzheimer's disease improved by more than average, suggesting that real-world institutions help overcome cognitive limitations.
    Keywords: Insurance Plan Switching; Overspending; Prescription Drugs
    JEL: D01 D8 H51 I10 I11 I18
    Date: 2011–09
  15. By: Ann P. Bartel; Ciaran S. Phibbs; Nancy Beaulieu; Patricia Stone
    Abstract: This paper contributes to the literature on the relationship between human capital and organizational performance. We use detailed longitudinal monthly data on nursing units in the Veterans Administration hospital system to identify how the human capital (general, hospital-specific and unit or team-specific) of the nursing team on the unit affects patients' outcomes. Since we use monthly, not annual, data, we are able to avoid the omitted variable bias and endogeneity bias that could result when annual data are used. Nurse staffing levels, general human capital, and unit-specific human capital have positive and significant effects on patient outcomes while the use of contract nurses, who have less specific capital than regular staff nurses, negatively impacts patient outcomes. Policies that would increase the specific human capital of the nursing staff are found to be cost-effective.
    JEL: I11 I12 J24
    Date: 2011–09

This nep-hea issue is ©2011 by Yong Yin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.