nep-hea New Economics Papers
on Health Economics
Issue of 2011‒11‒21
twenty-two papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Schooling and youth mortality: learning from a mass military exemption By Piero Cipollone; Alfonso Rosolia
  2. Healthcare in Italy: expenditure determinants and regional differentials By Maura Francese; Marzia Romanelli
  3. Seeds of hope: Assessing the effect of development aid on the reduction of child mortality By Roberto Burguet; Marcelo Soto
  4. Economic Crises, Maternal and Infant Mortality, Low Birth Weight and Enrollment Rates: Evidence from Argentina's Downturns By Cruces, Guillermo; Glüzmann, Pablo; López-Calva, Luis Felipe
  5. The Effects of Female Labor Force Participation on Obesity By Gomis-Porqueras, Pedro; Mitnik, Oscar A.; Peralta-Alva, Adrian; Schmeiser, Maximilian D.
  6. The Intergenerational Transmission of Human Capital: Exploring the Role of Skills and Health Using Data on Adoptees and Twins By Lundborg, Petter; Nordin, Martin; Rooth, Dan-Olof
  7. Prices and Choices in the Swiss Health Care Insurance Market By Yves Ortiz
  8. The Oregon Health Insurance Experiment: Evidence from the First Year By Finkelstein, Amy, et al.
  9. "I'm afraid I have bad news for you . . ." Estimating the impact of different health impairments on subjective well-being By Martin Binder; Alex Coad
  10. Smokers, Smoking Deprivation, and Time Discounting By Shoko Yamane; Hiroyasu Yoneda; Taiki Takahashi; Yoshio Kamijo; Yasuhiro Komori; Fumihiko Hiruma; Yoshiro Tsutsui
  11. THE REFORM OF THE PUBLIC HEALTH INSURANCE AND ECONOMIC GROWTH OF JAPAN By Toshihiro Ihori, Ryuta Ray Kato, Masumi Kawade, Shun-ichiro Bessho
  12. Consenting to health record linkage: evidence from the British Household Panel Study By Knies, Gundi; Sala, Emanuela; Burton, Jonathan
  14. Survival expectations, subjective health and smoking: evidence from European countries By S. Balia ;
  15. Parental Income and Smoking Participation in Adolescents: Implications of misclassification error in empirical studies of adolescent smoking participation By I. Edoka ;
  16. Exploring comparative effect heterogeneity with instrumental variables: prehospital intubation and mortality By H. Evans;; A. Basu;
  17. Only in the Heat of the Moment? A Study of the Relation between Weather and Mortality in Germany By M. Karlsson ;; M. Schmitt ;
  18. The Effect of Gambling on Health: Evidence from Canada By Humphreys, Brad; Nyman, John; Ruseski, Jane
  19. Does High Involvement Management Improve Worker Wellbeing? By Alex Bryson; Petri Böckerman; Pekka Ilmakunnas
  20. Curative Activities of Township Hospitals in Weifang Prefecture, China: an analysis of environmental and supply-side determinants By Xiao Xian HUANG; Aurore PELISSIER; Jacky MATHONNAT; Martine AUDIBERT; Ningshan CHEN; Anning MA
  21. The Progressivity Of Health Care Services In Ghana By Mawuli Gaddah; Alistair Munro
  22. Endogenous lifetime, accidental bequests and economic growth By Fanti, Luciano; Gori, Luca; Tramontana, Fabio

  1. By: Piero Cipollone (World Bank and Bank of Italy); Alfonso Rosolia (Bank of Italy and CEPR)
    Abstract: We examine the relationship between education and mortality in a young population of Italian males. In 1981 several cohorts of young men from specific southern towns were unexpectedly exempted from compulsory military service after a major quake hit the region. Comparisons of exempt cohorts from least damaged towns on the border of the quake region with similar ones from neighbouring non-exempt towns just outside the region show that, by 1991, the cohorts exempted while still in high school display significantly higher graduation rates. The probability of dying over the decade 1991-2001 was also significantly lower. Several robustness checks confirm that the findings do not reflect omitted quake-related confounding factors, such as the ensuing compensatory interventions. Moreover, cohorts exempted soon after high school age do not display higher schooling or lower mortality rates, thus excluding that the main findings reflect direct effects of military service on subsequent mortality rather than a causal effect of schooling. We conclude that increasing the proportion of high school graduates by 1 percentage point leads to 0.1-0.2 percentage points lower mortality rates between the ages of 25 and 35.
    Keywords: education, mortality, health, schooling, human capital
    JEL: I20 I12
    Date: 2011–06
  2. By: Maura Francese (Bank of Italy); Marzia Romanelli (Bank of Italy)
    Abstract: The aim of this work is to identify the determinants of health spending differentials among Italian regions, which could highlight the existence of potential margins for savings. The analysis exploits a dataset for the panel of the 21 Italian regions starting in the early 1990s and ending in 2006. After having controlled for standard healthcare demand indicators, spending differentials appear to be associated with differences in the degree of appropriateness of the treatments, supply structure and social capital indicators. These results suggest that savings could be achieved without reducing the amount of services supplied to citizens. This is particularly important in view of the expected rise in health spending associated with the forecast demographic developments.
    Keywords: government expenditure, health, regional variation
    JEL: H51 I1
    Date: 2011–10
  3. By: Roberto Burguet; Marcelo Soto
    Abstract: The Millennium Declaration (2000) set as one of its targets a substantial reduction in child mortality. This paper studies whether the massive increase in development aid can account for part of the reduction in child mortality observed in developing countries since the year 2000. To do so, we analyze a panel of more than 130 developing countries over the 2000-2008 period. We use the time trend evolution of aid to identify an exogenous source of variation. Total aid has had no statistically significant effect on child mortality. However, a disaggregate analysis identifies certain sectors of aid that have had a significant impact. The effects have been larger in high mortality countries, including Sub-Saharan Africa. Projections based on our estimates strongly support the concern that most countries in that region will miss the Millennium Goals target on child mortality.
    Keywords: ODA, child mortality, aid effectiveness.
    JEL: O11 O15
    Date: 2011–01–14
  4. By: Cruces, Guillermo (CEDLAS-UNLP); Glüzmann, Pablo (CEDLAS-UNLP); López-Calva, Luis Felipe (World Bank)
    Abstract: This study investigates the impact of recent crises in Argentina (including the severe downturn of 2001-2002) on health and education outcomes. The identification strategy relies on both the inter-temporal and the cross-provincial co-variation between changes in regional GDP and outcomes by province. These results indicate significant and substantial effects of aggregate fluctuations on maternal and infant mortality and low birth weight, with countercyclical though not significant patterns for enrollment rates. Finally, provincial public expenditures on health and education are correlated with the incidence of low birth weight and school enrollment for teenagers, with worsening results associated with GDP declines.
    Keywords: crisis, infant mortality, maternal mortality, low birth weight, poverty, Argentina
    Date: 2011–10
  5. By: Gomis-Porqueras, Pedro (Monash University); Mitnik, Oscar A. (University of Miami); Peralta-Alva, Adrian (Federal Reserve Bank of St. Louis); Schmeiser, Maximilian D. (Federal Reserve Board of Governors)
    Abstract: This paper assesses whether a causal relationship exists between recent increases in female labor force participation and the increased prevalence of obesity amongst women. The expansions of the Earned Income Tax Credit (EITC) in the 1980s and 1990s have been established by prior literature as having generated variation in female labor supply, particularly amongst single mothers. Here, we use this plausibly exogenous variation in female labor supply to identify the effect of labor force participation on obesity status. We use data from the National Health Interview Survey (NHIS) and replicate labor supply effects of the EITC expansions found in previous literature. This validates employing a difference-in-differences estimation strategy in the NHIS data, as has been done in several other data sets. Depending on the specification, we find that increased labor force participation can account for at most 19% of the observed change in obesity prevalence over our sample period. Our preferred specification, however, suggests that there is no causal link between increased female labor force participation and increased obesity.
    Keywords: female labor force participation, obesity, earned income tax credit
    JEL: H31 I12 J22
    Date: 2011–10
  6. By: Lundborg, Petter (Lund University); Nordin, Martin (Lund University); Rooth, Dan-Olof (Linneaus University)
    Abstract: In this paper, we focus on possible causal mechanisms behind the intergenerational transmission of human capital. For this purpose, we use both an adoption and a twin design and study the effect of parents' education on their children's cognitive skills, non-cognitive skills, and health. Our results show that greater parental education increases children's cognitive and non-cognitive skills, as well as their health. These results suggest that the effect of parents' education on children's education may work partly through the positive effect that parental education has on children's skills and health.
    Keywords: intergenerational transmission, human capital, education, health, cognitive skills, non-cognitive skills, adoptees, twins
    JEL: I12 I11 J14 J12 C41
    Date: 2011–10
  7. By: Yves Ortiz (Study Center Gerzensee)
    Abstract: We describe three different extensive data sets on the Swiss market for basic health care insurance—a homogeneous product by construction. First, we provide descriptive statistics on market prices for period 2004 - 2010. Second, we present aggregated data on health plan choices made by Swiss residents in the same period. Third, we describe and analyze an extensive survey executed in 2009 which documents health care plan and insurer choices of enrollees as well as their switching behavior. Price data reveal an increase of the mean price level and substantial and persistent price level differences across regions. We also observe a steady increase of price dispersion; contemporaneously, enrollees face an increasing number of operating companies. Indeed, we find a strong positive relation between regional price dis- persion, the regional price level and the number of operating companies. Although enrollees have moved to less expensive health care plans, our aggregate and survey data point to insuf- ficient price optimization on the part of the enrollees. Aggregate data disclose an increasing gap between the premia paid by enrollees and the lowest premia available in the respective submarket. Moreover, Swiss residents could have paid less on average if they had chosen their insurer randomly. Our Survey data confirm this observation: Despite large potential monetary gains, only 20% of the enrollees did switch their insurance company by the end of November 2009. In addition, many enrollees switched to more expensive insurance companies, thereby incurring negative monetary benefits.
    Date: 2011–11
  8. By: Finkelstein, Amy, et al. (NBER)
    Abstract: In 2008, a group of uninsured low-income adults in Oregon was selected by lottery to be given the chance to apply for Medicaid. This lottery provides a unique opportunity to gauge the effects of expanding access to public health insurance on the health care use, financial strain, and health of low-income adults using a randomized controlled design. In the year after random assignment, the treatment group selected by the lottery was about 25 percentage points more likely to have insurance than the control group that was not selected. We find that in this first year, the treatment group had substantively and statistically significantly higher health care utilization (including primary and preventive care as well as hospitalizations), lower out-of-pocket medical expenditures and medical debt (including fewer bills sent to collection), and better self-reported physical and mental health than the control group.
    Date: 2011–10
  9. By: Martin Binder; Alex Coad
    Abstract: Bad health can severely disrupt a person's life. We apply matching estimators to examine how changes in subjective health status as well as different (objective) conditions of bad health affect subjective well-being. The strongest effect is in the category alcohol and drug abuse, followed by anxiety, depression and other mental illnesses, stroke, diabetes and cancer. We also take into account differences in "Big Five" personality traits. Adaptation to health impairments depends strongly on the health impairment examined. There is also a puzzling asymmetry: strong adverse reactions to deteriorations in health are observed alongside weak increases in well-being after health improvements.
    Keywords: Length 33 pages
    Date: 2011–10–24
  10. By: Shoko Yamane; Hiroyasu Yoneda; Taiki Takahashi; Yoshio Kamijo; Yasuhiro Komori; Fumihiko Hiruma; Yoshiro Tsutsui
    Abstract: This paper investigates whether smokers exhibit greater time discounting than non-smokers, and how short-term nicotine deprivation affects time discounting. A unique feature of our experiment is that our subjects receive rewards not only of money, but also of actual tobacco. This is done in order to elicit smokersf true preferences. Smokers are more impatient than non-smokers, consistent with previous studies. Additionally, nicotine deprivation makes smokers even more impatient. These results suggest that nicotine concentration has different effects on time preferences in the short and long runs.
    Date: 2011–11
  11. By: Toshihiro Ihori, Ryuta Ray Kato, Masumi Kawade, Shun-ichiro Bessho
    Abstract: This paper evaluates one of the most drastic reforms of the Japanese public health insurance started in year 2006, by numerically examining the reform in an aging Japan in a dynamic context with overlapping generations within a computable general equilibrium framework. Our simulation results are as follows. First of all, an increase in the co-payment rate, which is one of the most prominent changes in the reform, would result in higher economic growth as well as higher welfare since it stimulates private savings. Secondly, the ex-post moral hazard behavior reduces economic growth. Thirdly, an increasing trend of the future public health insurance benefits can mainly be explained by an aging population, and an increase in the co-payment rate has little effect to reduce the public health insurance benefits in the future. Fourthly, the effect of a decrease in the medical cost, which could possibly be achieved by the improvement in efficiency in the public health insurance, the provision of more preventative medical services, or technological progress in the medical field, on the future burdens is very small. Finally, if the government implements a policy to keep the ratio of the public health insurance benefits to GDP constant, then the government has to keep reducing the public health insurance benefits over time, and the reduction rate should be 45 percent in year 2050. Such a policy also eventuates in lower economic growth until around year 2035. Our simulation results thus indicate that the reform is not so effective to reduce the future public health insurance benefits, but it can achieve higher economic growth and enhance welfare by stimulating private savings.
    JEL: C68 D58 E17 E62 H51 H55 H62 I18 O40
    Date: 2011
  12. By: Knies, Gundi; Sala, Emanuela; Burton, Jonathan
    Abstract: The British Household Panel Survey (BHPS) is the first study of its kind to have asked for permission to link to a range of administrative health records. Multivariate analysis is applied to investigate whether there is consent bias. We find that consent on the BHPS is not biased with respect to socio-economic characteristics or health; recent users of GP services are underrepresented among consenters. Whilst consent rates are lower than on previous surveys with a more medical focus, the problem of bias is less of an issue.
    Date: 2011–11–07
  13. By: D. Fabbri ;; C. Monfardini ;
    Abstract: We investigate whether people enrolled into voluntary health insurance (VHI) substitute public consumption with private (opt out) or just enlarge their private consumption, without reducing reliance upon public provisions (top up). We study the case of Italy, where a mixed insurance system is in place. To this purpose, we specify a joint model for public and private specialist visits counts, and allow for different degrees of endogenous supplementary insurance coverage, looking at the insurance coverage as driven by a trinomial choice process. We disentangle the effect of income and wealth by going through two channels: the direct impact on the demand for healthcare and that due to selection into VHI. We find evidence of opting out: richer and wealthier individuals consume more private services and concomitantly reduce those services publicly provided through selection into for-profit VHI. These results imply that the market for VHI eases the redistribution from high income (doubly insured) individuals to low income (not doubly insured) ones operated by the Italian National Health Service (NHS). Accounting for VHI endogeneity in the joint model of the two counts is crucial to this conclusion.
    Keywords: Public provision of private goods; health insurance; bivariate count data model; endogenous multinomial treatment; simultaneous equation modeling;
    JEL: C34 C35 D12 H44 I11
    Date: 2011–09
  14. By: S. Balia ;
    Abstract: This work aims to assess risk perception of smokers in reporting survival expectations and subjective health. In particular, the analysis investigates individuals’ perception of smoking effects in the short and long-term and whether they believe that such detrimental effects can be reversed. Data from the Survey of Health, Ageing and Retirement in Europe, which contain a numerical measure of subjective survival probability, are used to estimate a simultaneous recursive system of equations for survival expectation, subjective health and smoking. Endogeneity and unobservable heterogeneity are addressed using a finite mixture model. This approach identifies two types of individuals that differ in level of optimism, risk perception and rationality in addiction. One important result is that for both types past smokers perceive smoking consequences as reversible, with some difference between the short and long-term. We also find evidence of differences among current and past smokers in the way they evaluate the opportunity cost of tobacco consumption.
    Keywords: survival expectations; subjective health; risk; smoking; EM algorithm
    JEL: I12 C0 C30 C41
    Date: 2011–09
  15. By: I. Edoka ;
    Abstract: In adults, the negative relationship between smoking and income is well established. However divergent results have been reported on the impact of parental socioeconomic status on adolescent smoking. In this study we investigate the extent to which misclassification errors in self-reported smoking affects estimates of the impact of parental income on smoking in adolescents aged 11-15 years old. We use the Household Survey for England (HSE) which contains both a self-reported smoking component and an objective measure of smoking obtained through cotinine assays. Smoking participation is modelled using self-reported smoking and cotinine-validated smoking as binary dependent variables in two separate probit models. We compare marginal effects of parental income (and other independent variables) in both models. Our results suggest that self-reported smoking is misreported leading to biased estimates of the effect of parental income on adolescent smoking. Income-related inequality in smoking (the concentration index) is also underestimated when misclassification errors vary across income quintiles.
    Keywords: Adolescent smoking; Self-reported smoking; Cotinine-validated smoking; Parental income; Misreporting; Concentration index
    JEL: I10 C42
    Date: 2011–09
  16. By: H. Evans;; A. Basu;
    Abstract: We highlight the role of local instrumental variable (LIV) methods in exploring treatment effect heterogeneity using an empirical example of evaluating the use versus non-use of prehospital intubation (PHI) in patients with traumatic injury on inpatient mortality. We find evidence that the effect of PHI on inpatient mortality varies over levels of unobserved confounders giving rise to a phenomenon known as essential heterogeneity. Under essential heterogeneity, the traditional instrumental variable (IV) method, when using a continuous IV, estimates an effect that is an arbitrary weighted average of the casual effects for marginal groups of patients whose PHI receipt are directly influenced by the IV levels. Instead, the LIV methods estimate the distribution of treatment effects for every margin that is identified by data and allow for predictable aggregation to recover estimates for meaningful treatment effect parameters such as the Average Treatment Effect (ATE) and the Effect on the Treated (TT). LIV methods also allow exploring heterogeneity in treatment effects over levels of observed confounders. In the PHI analysis, we estimate an ATE of 0.074. We find strong evidence of positive self-selection in practice based on observed and unobserved characteristics, whereby patients who were most likely to be harmed by PHI were also less likely to receive PHI. However, the degree of positive self-selection mitigates in regions with higher rates of PHI use. We also explore factors associated with the prediction of significant harm by PHI. We provide clinical interpretation of results and discuss the importance of these methods in the context of comparative effectiveness research.
    Keywords: Instrumental variables; local IV methods; heterogeneity; prehospital intubation; mortality
    Date: 2011–08
  17. By: M. Karlsson ;; M. Schmitt ;
    Abstract: In this study we analyze the relationship between heat events and mortality in Germany. The main research questions are: Does heat lead to rising mortality and if yes, are the eects persistent or compensated for in the near future? Furthermore, we consider dierences between heat eects in urban and rural environments. Cause specic daily mortality and meteorological data were connected on the county level. We allow for static as well as dynamic relations between extreme temperatures and mortality and compare dierent panel data estimation approaches. We nd that heat has a signicant positive impact on mortality. The strongest eects can be observed on the same day and the rst week afterwards. The mortality increase ranges between 0.003 and 3.5 per 100,000 inhabitants depending on the particular death cause. We do not nd a signicant negative, and thus compensating, impact in the medium term, which is contrary to the Harvesting Hypothesis. Using a value of statistical life approach we estimate that each additional hot day in Germany induces a total loss of e1,861M. Moreover, the environment plays an important role. The heat induced increase in mortality is signicantly higher in urban areas.
    Keywords: Climate Change, Harvesting Hypothesis, Heat Waves, Mortality, Urban Heat, Island effect
    JEL: I10 Q51 Q54
    Date: 2011–08
  18. By: Humphreys, Brad (University of Alberta, Department of Economics); Nyman, John (University of Minnesota); Ruseski, Jane (University of Alberta, Department of Economics)
    Abstract: The relationship between gambling and health has important economic and public policy implications. We develop causal evidence about the relationship between recreational gambling and health using data from the Canadian Community Health Survey (CCHS) cycles 2.1, 3.1 and 4.1. Recreational gamblers are gamblers who are classifi ed as "non-problem" gamblers according to the Canadian Problem Gambling Index (CPGI). Gambling is treated as an endogenous regressor in the health equations. The results of instrumental variable and bivariate probit models of participation in gambling and health outcomes indicate that recreational gambling has either no or a negative impact on the probability of having certain chronic conditions. These results differ from studies that find a positive association between problem gambling and adverse health outcomes. Exogeneity tests suggest that gambling is endogenous; hence, empirical methods that address endogeneity are necessary to develop causal evidence of a relationship between gambling and health.
    Keywords: health; government policy; sports; gambling; recreation; tourism
    JEL: I18 L83
    Date: 2011–11–01
  19. By: Alex Bryson; Petri Böckerman; Pekka Ilmakunnas
    Abstract: Employees exposed to high involvement management (HIM) practices have higher subjective wellbeing, fewer accidents but more short absence spells than "like" employees not exposed to HIM. These results are robust to extensive work, wage and sickness absence history controls. We present a model which highlights the possibility of higher short-term absence in the presence of HIM because it is more demanding than standard production and because multi-skilled HIM workers cover for one another's short absences thus reducing the cost of replacement labour faced by the employer. We find direct empirical support for the assumptions in the model. Consistent with the model, because long-term absences entail replacement labour costs for HIM and non-HIM employers alike, long-term absences are independent of exposure to HIM.
    Keywords: Health, subjective wellbeing, sickness absence, job satisfaction, pain, high involvement management, high performance work system, performance-related pay, training, team working, information sharing
    JEL: I10 J28 J81 M52 M53 M54
    Date: 2011–11
  20. By: Xiao Xian HUANG (-); Aurore PELISSIER (Centre d'Etudes et de Recherches sur le Développement International); Jacky MATHONNAT (Centre d'Etudes et de Recherches sur le Développement International); Martine AUDIBERT (Centre d'Etudes et de Recherches sur le Développement International); Ningshan CHEN; Anning MA
    Abstract: Township hospitals, which are an important link of the Chinese rural healthcare system, were affected by the successive socio-economic reforms since the 1980s. As a consequence, their utilization declined. From longitudinal data covering 9 years (2000-2008) and 24 township hospitals randomly selected in Weifang prefecture (Shandong province, China), this article analyses the environmental and supply-side determinants of township hospitals curative activities, measured by the number of outpatient visits and that of discharged patients. The Hausman-Taylor and the Fixed-Effect Vector Decomposition estimators are employed in order to cope with time-invariant variables. The New Rural Cooperative Medical Scheme, introduced in 2003, allowed increasing the activity of township hospitals even if financial barriers remain to the access to expensive medical services. The analyses underline that referral practices should be reinforced and the size of the township hospitals needs to be adequate as they seem to be over-sized.
    Keywords: China, Healthcare services, Township Hospitals, New Rural Cooperative Medical Scheme, Hausman-Taylor, Fixed-effects vector decomposition
    JEL: O12 I38 I1 G22
    Date: 2011
  21. By: Mawuli Gaddah; Alistair Munro (National Graduate Institute for Policy Studies)
    Abstract: This paper examines the incidence of public health subsidies in Ghana using the Ghana Living Standards Survey. Using a combination of (uniform) benefit incidence analysis and a discrete choice model, our results give a clear evidence of progressivity with consistent ordering: postnatal and prenatal services are the most progressive, followed by clinic visits, and then hospital visits. Children health care services are more progressive than adults'. Own price and income elasticities are higher for public health care than private health care and for adults than children. Poorer households are substantially more price responsive than wealthy ones, implying that fee increases for public health care will impact negatively on equity in health care. Simulations based on an estimated nested logit model show the importance of opportunity costs in healthcare decisions and suggest that reforms that focus only on out-pocket expenses will have a limited ability to extend public healthcare to all potential users.
    Date: 2011–11
  22. By: Fanti, Luciano; Gori, Luca; Tramontana, Fabio
    Abstract: his paper introduces unintentional bequests in a closed economy overlapping generations model à la Chakraborty (2004). We show that poverty traps due to scarce public investments in health can exist. However, and most important, the existence of unintentional bequests makes the health tax rate to play a prominent role in determining the stability conditions of the equilibrium in rich economies. Indeed, non-monotonic dynamics, Neimark-Sacker bifurcations and deterministic chaos can occur depending on the size of the public health system.
    Keywords: Accidental bequests; Endogenous lifetime; Health; OLG model
    JEL: I18 J18 O40 C62
    Date: 2011–11–11

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