nep-hea New Economics Papers
on Health Economics
Issue of 2012‒02‒27
nineteen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Lifespan variation by occupational class: compression or stagnation over time? By Alyson A. van Raalte; Pekka Martikainen; Mikko Myrskylä
  2. Rainfall shocks, parental behavior and breastfeeding: evidence from rural Vietnam By Thuan Q. Thai; Mikko Myrskylä
  3. Family, money, and health: regional differences in the determinants of life cycle life satisfaction By Rachel Margolis; Mikko Myrskylä
  4. Incentive and Selection Effects of Medigap Insurance on Inpatient Care By Valentino Dardanoni; Paolo Li Donni
  5. The Healthy Fright of Losing a Good One for a Bad One By Cristini, Annalisa; Origo, Federica; Pinoli, Sara
  6. Understanding Inappropriateness in Health Care. The Role of Supply Structure, Pricing Policies and Political Institutions in Caesarean Deliveries By Maura Francese; Massimiliano Piacenza; Marzia Romanelli; Gilberto Turati
  7. The Impact of the Global Financial Crisis on Public Health Expenditures in the Economies of the Former Soviet Union By Roman Mogilevsky
  8. Provision of Long Term Care for the Elderly in Poland in Comparison to Other European Countries By Izabela Styczynska (Marcinkowska)
  9. Socioeconomic Determinants of Physical Inactivity among Japanese Workers By Kumagai, Narimasa
  10. Long Term Impacts of Compensatory Preschool on Health and Behavior: Evidence from Head Start By Carneiro, Pedro; Ginja, Rita
  11. Long-term Care Insurance in Germany Assessments, benefits, care arrangements and funding By Theobald, Hildegard
  12. Long-Run Effects of Gestation during the Dutch Hunger Winter Famine on Labor Market and Hospitalization Outcomes By Robert S. Scholte; Gerard J. van den Berg; Maarten Lindeboom
  13. The Potential Role of Pay-for-Performance in Irish Health Care By Nolan, Anne; O'Reilly, Jacqueline; Smith, Samantha; Brick, Aoife
  14. Ensuring the Service Quality of Long-Term Care Provided through Competitive Markets: The Experience of Care Workers' Training in Japan By Yoshihiko Kadoya
  15. Stimulating demand for AIDS prevention : lessons from the RESPECT trial By de Walque, Damien; Dow, William H.; Medlin, Carol; Nathan, Rose
  16. Increasing life expectancy and optimal retirement:does population aging necessarily undermine economic prosperity? By Klaus Prettner; David Canning
  17. The Impact of Childhood Health on Adult Educational Attainment: Evidence from Modern Mandatory School Vaccination Laws By Dara Lee
  18. Ill-health and transitions to part-time work and self-employment among older workers By Zucchelli, E.;; Harris, M.;; Zhao, X.;
  19. Intergenerational effect of schooling and childhood overweight By Nakamura, R.;

  1. By: Alyson A. van Raalte (Max Planck Institute for Demographic Research, Rostock, Germany); Pekka Martikainen; Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Adult lifespan variation in most western countries has stagnated since the 1960s, despite continued improvements in longevity. Cross-sectional analyses, however, find that in the 1990s higher socio-economic position was associated with lower lifespan variation. Trends in this association over time are unknown. We investigated trends in lifespan variation over four decades by occupational social class (manual, lower non-manual, upper non-manual) using Finnish register data (1971-2007). We performed age and cause-of-death decompositions of lifespan variation for each sex (a) by occupational class over time and (b) between occupational classes at a shared life expectancy. We found that although all occupational classes experienced increases in life expectancy, manual workers had stagnating lifespan variation over time while the higher occupational groups experienced mortality compression. These differences were caused by diverging trends in early adult mortality: all occupational classes experienced similar trends in lifespan variation at older ages, but variation in early adult mortality increased for all classes except the highest category. The high and stagnant lifespan variation of the manual class was mostly due to higher early adult mortality from external causes. These results suggest that mortality compression can be compatible with increases in life expectancy by tackling inequalities in early adult mortality.
    Keywords: Finland, adult mortality, age distribution, causes of death, mortality trends, socio-economic differentials
    JEL: J1 Z0
    Date: 2012–02
  2. By: Thuan Q. Thai (Max Planck Institute for Demographic Research, Rostock, Germany); Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: In developing countries, rainfall shocks around the time of birth have been shown decrease later health. The mechanism is unknown, but could run through income shocks, disease exposure, or increasing opportunity cost of parental time which influences parenting behavior. We use the Vietnam Demographic Health Surveys to study how rainfall shocks around the birth year influence a key dimension of parental behavior, breastfeeding. Consistent with the opportunity cost of time theory, rainfall reduces breastfeeding: 25% excess rainfall in the birth year decreases the proportion that is breastfed more than a year by 11 percentage points. The effect is particularly strong among farming families, for whom rainfall increases the opportunity cost of time through labor demand. These results are the first to shed light on the mechanism linking rainfall shocks and child health. Policy aiming to improve child health through breastfeeding should focus on the impact of labor demand on breastfeeding.
    Keywords: Vietnam, breast feeding, cost of children
    JEL: J1 Z0
    Date: 2012–02
  3. By: Rachel Margolis; Mikko Myrskylä (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: We examine how family, money, and health explain variation in life satisfaction (“happiness”) over the life cycle. Globally, these factors explain a substantial fraction of happiness, increasing from 12 percent in young adulthood to 15 percent in mature adulthood. Health is the most important factor, and its importance increases with age. Income is important only at ages below 50. Remarkably, the contribution of family is small across ages. Across regions health is most important in the wealthier, and income in the poorer regions of the world. Family explains a substantial fraction of happiness only in Western Europe and Anglophone countries.
    Keywords: World, family, health, income, mental health
    JEL: J1 Z0
    Date: 2012–02
  4. By: Valentino Dardanoni (Dipartimento SEAF, Università di Palermo); Paolo Li Donni (Dipartimento SEAF, Università di Palermo)
    Abstract: The Medicare program, which provides insurance coverage to the elderly in the United States, does not protect them fully against high out-of-pocket costs. For this reason private supplementary insurance, named Medigap, has been available to cover Medicare gaps. This paper studies how Medigap affects the utilization of inpatient care, separating the incentive and selection effects of supplementary insurance. For this purpose, we use two alternative estimation methods: a standard recursive bivariate probit and a discrete multivariate finite mixture model. We find that estimated incentive effects are modest and quite similar across models. On the other hand, there seems to be very significant selection when one conditions only on variables used by Medigap insurers, with the presence of both adversely and advantageously selected individuals, stemming from the multidimensional nature of residual heterogeneity.
    Date: 2012
  5. By: Cristini, Annalisa (University of Bergamo); Origo, Federica (University of Bergamo); Pinoli, Sara (University of Bergamo)
    Abstract: In this paper we study the effect of different degrees of employment protection on absenteeism, paying attention to differences between workers moving from protected jobs to insecure jobs, on the one hand, and workers moving from insecure to secure jobs, on the other hand. Using a large representative sample of Italian workers, we show that workers' reaction in terms of sickness leave is not symmetric: losing protection (bad news) is more effective than gaining it (good news). We claim that this asymmetry is consistent with the behavior of financial markets responding to good and bad news. In our case, workers react in a more prudential way to improvements in their employment status ("wait and see" strategy), while they do immediately adjust to worsening job security by showing off healthy behavior.
    Keywords: absenteeism, employment protection, delayed reaction
    JEL: J22 J41
    Date: 2012–02
  6. By: Maura Francese (Structural Economic Analysis Department – Economics, Research and International Relations Area, Bank of Italy, Italy); Massimiliano Piacenza (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy); Marzia Romanelli (Structural Economic Analysis Department – Economics, Research and International Relations Area, Bank of Italy, Italy); Gilberto Turati (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)
    Abstract: The upward trend in the incidence of caesarean deliveries is a widespread stylised fact in many countries. Several studies have argued that it does not reflect, at least in part, patients’ needs but that it is also influenced by other factors, such as providers/physicians incentives. Not surprisingly, the incidence of caesarean sections is often used as an indicator of the degree of (in)appropriateness in health care, which has also been found to be strongly correlated with excessive expenditure levels. In this paper, we exploit the significant regional variation in the share of caesarean sections recorded in Italy to explore the impact on inappropriateness of three groups of variables: 1) structural supply indicators (e.g., the incidence of private providers); 2) pricing policies (role of DRG tariffs); 3) political economy indicators (to capture different approaches to the governance of the health care sector). The analysis controls for demand side factors, such as the demographic structure of the population and education levels. The results suggest that DRG tariffs might be an effective policy tool to control inappropriateness, once the composition of the regional health care system – in terms of private vs. public providers – is taken into account. Also some characteristics of regional governments and the funding sources of regional health spending do matter.
    Keywords: health care, inappropriateness, regional disparities, pricing policy, political economy
    JEL: D78 H75 I18 L33
    Date: 2012–02
  7. By: Roman Mogilevsky
    Abstract: The financial crisis strongly affected the countries of the former Soviet Union1 (FSU) in 2008-2009. All of the countries experienced either a recession or a considerable slowdown in growth. Under such conditions, public expenditures on health were at risk of being cut. This brief explores whether or not this actually happened and why or why not.
    Keywords: Global Financial Crisis, economy, Public Health Expenditures, Former Soviet Union
    Date: 2011–09
  8. By: Izabela Styczynska (Marcinkowska)
    Abstract: In recent years, population ageing has attracted the attention of research and policy advisors in all European countries. Several policy actions have been directed toward ensuring optimal long-term care (LTC) for elderly people while maintaining fiscal rationality. LTC systems are very different across all European countries. Their design is characterized by diverse arrangements for the provision of care/organization and financing. Despite general concerns, the Polish LTC system is still at the bottom of the pile in terms of the organization and provision of care.
    Keywords: LTC system,Labor market, social policy and social services, Europe, long-term care
    Date: 2012–02
  9. By: Kumagai, Narimasa
    Abstract: Background: Half of Japanese workers are physically inactive, but there are no studies on the relation between the leisure-time physical inactivity of Japanese workers and their socioeconomic status. The proportion of female workers who are physically inactive has been larger than that of male workers. Objectives: Using micro-data from nationwide surveys in Japan, this study explored the gender differences in socioeconomic determinants of leisure-time physical inactivity. Methods: We first estimated two-stage probit least squares models to examine whether simultaneous relationships between physical inactivity and working hours existed. Second, endogenous switching models were estimated to analyze whether physical inactivity depended on poor health status. We took into account the existence of unobserved factors affecting poor health status and physical inactivity. Results: The results of two-stage probit least squares estimation did not confirm simultaneous relationships between physical inactivity and working hours. The estimation results of the endogenous switching models showed that working hours had a positive effect on poor health status, and poor health status had a positive effect on physical inactivity. Physical inactivity was strongly associated with low educational attainment and marital status. For male workers, income had a negative effect on physical inactivity at the 5 percent significance level. In contrast, female income had no effect on physical inactivity. Conclusions: There are gender differences in the association of income and physical inactivity among Japanese workers. Workers in poorer health were likely to be physically inactive. To reduce chronic diseases due to physical inactivity, more attention should be paid to the influence of income reduction on poor health in males.
    Date: 2012–01
  10. By: Carneiro, Pedro (University College London,); Ginja, Rita (Uppsala Center for Labor Studies)
    Abstract: This paper provides new estimates of the medium and long-term impacts of Head Start on the health and behavioral problems of its participants. We identify these impacts using discontinuities in the probability of participation induced by program eligibility rules. Our strategy allows us to identify the effect of Head Start for the set of individuals in the neighborhoods of multiple discontinuities, which vary with family size, state and year (as opposed to a smaller set of individuals neighboring a single discontinuity). Participation in the program reduces the incidence of behavioral problems, serious health problems and obesity of male children at ages 12 and 13. It also lowers depression and obesity among adolescents, and reduces engagement in criminal activities for young adults.
    Keywords: Regression discontinuity design; early childhood development; non-cognitive skills; Head Start
    JEL: C21 I28 I38
    Date: 2012–02–13
  11. By: Theobald, Hildegard (University of Vechta)
    Abstract: The establishment of Long-term Care Insurance (LTCI) in Germany in 1995/96 significantly restructured Germany's public long-term care support. Before, the responsibility for providing care to Germany's elderly population lay mainly with the family, while based on the principle of subsidiarity public support was only available after a means-test within a tax-based social assistance framework. The law on LTCI established a social-insurance and mandatory private insurance scheme to grant universal public support in strictly defined situations of care dependency. LTCI in Germany was created at the beginning of the 1990s in a situation of welfare state constraints characterised by criticism towards comprehensive public welfare spending and an increasing emphasis on individual responsibilities and market solutions (Landenberger, 1994; Meyer, 1996). Against this background the law was a compromise on the balance of private, family, public and market responsibilities between more economically - and more social-policy oriented politicians and social actors. The LTCI law aimed to combine several goals, namely the introduction of universal social rights, cost containment strategies, the promotion of ageing in place, with an emphasis on family care, and the expansion of a market-oriented care infrastructure (Theobald, 2011, forthcoming). The goals are reflected in the definition of social rights valid in the whole country, the construction of funding schemes and the regulation of family care-giving and professional care provision based on free choice for users between both types of care provision and care providers. Prevalent benefit use and care arrangement patterns emerging within the framework of LTCI still confirm a family-oriented strategy of long-term care provision mainly supported by cash payments. However, a more detailed analysis of current care arrangements reveals considerable differences in the interplay of family care, professional care provision and further paid care services depending on gender, socio-economic class and migration background. Furthermore, the development of a market-oriented care infrastructure based on price competition resulted in considerable regional differences, which run counter to the goal of the insurance to provide equal support in defined situations of care dependency throughout the country. Public long-term care support is embedded and simultaneously limited by mode and principles of funding; i.e. the introduction of a separated social- and private insurance scheme and cost containment strategies. The basic presumptions surrounding the two distinct schemes on the role of state respectively public, market or private responsibilities are the subject matter of continual discussions. The paper aims to give a broad overview of social rights, benefits, modes and principles of LTCI funding and an analysis of outcomes related to patterns of care provision and the financial development of this insurance. First, the interrelationship of LTCI with other valid policy schemes in the sector provide a background for the analysis and are outlined to reveal the position of LTCI and further available public support. Second, the basic features of LTCI are presented (sections 2 and 3). The paper goes on to describe and explain assessment procedures, benefit use, prevalent care arrangements patterns, and the situation of informal carers against the background of LTCI (sections 4 and 5). Funding schemes are presented and discussed with regard to their financial development and difficulties, alternative funding concepts and processes of policy-making with their political and social actors (section 6). Finally, LTCI features and their outcomes related to care provision and funding are summarised and discussed in the conclusion (section 7).
    Keywords: Long-term Care Insurance; LTCI; Germany; elderly population; family care; market-oriented care
    JEL: H53
    Date: 2012–02–06
  12. By: Robert S. Scholte (VU University Amsterdam); Gerard J. van den Berg (University of Mannheim, VU University Amsterdam); Maarten Lindeboom (VU University Amsterdam)
    Abstract: This is the first study to analyze effects of in utero exposure to the severe Dutch Hunger Winter famine (1944/45) on labor market outcomes and hospitalization. This famine is clearly demarcated in time and space. It was not anticipated. Nutritional conditions were stable before and after the famine. We provide results of exposure by sub-interval of gestation. We are the first to use population registers for the full population. We find a significantly negative effect of exposure during the first trimester of gestation on employment outcomes 53 or more years after birth, as well as effects on hospitalization.
    Keywords: famine; long-run effects; labor and hospitalization outcomes
    JEL: I10 I12 J01 J13 J24
    Date: 2012–02–14
  13. By: Nolan, Anne; O'Reilly, Jacqueline; Smith, Samantha; Brick, Aoife
    Abstract: The current recession dictates that large decreases in public expenditure are required. As the second largest component of public expenditure, health is particularly vulnerable to the effects of the further cuts in expenditure that are required over the period 2012-2014. In the context of diminishing financial resources, there is increasing emphasis on maximising the value of expenditure by achieving efficient delivery of high-quality health-care services. In addition, the Irish health system is characterised by a complex set of financial incentives which have important implications for efficiency and equity. This paper examines international evidence on pay for performance (P4P) schemes to inform policymakers on the potential for implementing P4P in the Irish health-care system. In P4P, payments are tied to performance. P4P is becoming increasingly common in international health-care systems despite the lack of evidence on its effectiveness and a lack of consensus on how to design and implement such programmes. It is therefore important to understand the implications of existing P4P programmes before recommending their introduction in the Irish context. We provide an overview of the literature relating to large-scale P4P schemes, focusing on programmes that have been instituted by national public sector organisations. The literature highlights the poor quality of evidence on P4P schemes, stemming partly from technical challenges inherent in evaluating P4P schemes. Notwithstanding these technical difficulties, the available evidence does not provide a clear answer to the question of whether P4P should be implemented. Limitations include difficulties in obtaining valid performance indicators, unintended consequences, and the absence of evidence on cost effectiveness of P4P schemes. We assess how a P4P scheme would interact with the payment structures already in place in the Irish health-care system. We conclude that while there is an obvious need for greater efficiency and quality in the system, there are reasons why P4P initiatives are not recommended at this stage at least until the many complexities in provider reimbursement, public/private interaction, and patient access to the system are resolved.
    Keywords: recession/Services/Health System/equity/cost
    Date: 2011
  14. By: Yoshihiko Kadoya
    Abstract: Ensuring the service quality of long-term care provided through competitive markets is a major concern among the governments of OECD members. The public officials in these nations recognise the importance of care workers' training to address this issue. However, most of them have hesitated to introduce comprehensive training due to financial constraints. Analysing the experience of Japan, this paper reveals that governments can ensure the financial sustainability of care workers' training by aiming at the best possible long-term care.
    Date: 2012–02
  15. By: de Walque, Damien; Dow, William H.; Medlin, Carol; Nathan, Rose
    Abstract: HIV-prevention strategies have yielded only limited success so far in slowing down the AIDS epidemic. This paper examines novel intervention strategies that use incentives to discourage risky sexual behaviors. Widely-adopted conditional cash transfer programs that offer payments conditioning on easily monitored behaviors, such as well-child health care visits, have shown positive impact on health outcomes. Similarly, contingency management approaches have successfully used outcome-based rewards to encourage behaviors that are not easily monitored, such as stopping drug abuse. These strategies have not been used in the sexual domain, so this paper assesses how incentives can be used to reduce risky sexual behavior. After discussing theoretical pathways, it discusses the use of sexual-behavior incentives in the Tanzanian RESPECT trial. There, participants who tested negative for sexually transmitted infections are eligible for outcome-based cash rewards. The trial was well-received in the communities, with high enrollment rates and more than 90 percent of participants viewing the incentives favorably. After one year, 57 percent of enrollees in the"low-value"reward arm stated that the cash rewards"very much"motivated sexual behavioral change, rising to 79 percent in the"high-value"reward arm. Despite its controversial nature, the authors argue for further testing of such incentive-based approaches to encouraging reductions in risky sexual behavior.
    Keywords: Health Monitoring&Evaluation,Population Policies,Disease Control&Prevention,HIV AIDS,Adolescent Health
    Date: 2012–02–01
  16. By: Klaus Prettner (Harvard Center for Population and Development Studies); David Canning (Harvard School of Public Health)
    Abstract: In this paper we analyze the eects of changes in longevity and the pace of technological progress on interest rates, savings behaviour and optimal retirement decisions. In so doing we embed the dynamic optimization problem of choosing a life-cycle consumption path and the retirement age into a general equilibrium setting. Thereby we assume that technology evolves exogenously and the production side of the economy can be described by means of a neoclassical production function. Our results show that (i) the aggregate capital to consumption ratio increases and interest rates decrease in response to increases in longevity; (ii) the response of the optimal retirement age to increases in longevity is ambiguous. However, for reasonable parameter values the optimal retirement age increases in longevity; (iii) the aggregate capital to consumption ratio decreases and interest rates increase in response to faster technological progress; (iv) the response of the optimal retirement age to faster technological progress is ambiguous. However, for reasonable parameter values the optimal retirement age increases in the pace of technological improvements.
    Keywords: endogenous retirement, life-cycle savings, population aging, technological progress, economic prosperity
    Date: 2012–02
  17. By: Dara Lee (Department of Economics, University of Missouri-Columbia)
    Abstract: This paper evaluates the economic consequences of mandatory school vaccination laws that were passed from the mid-1960s to late-1970s. After the invention of a number of key vaccines, states began to require proof of immunization against certain infectious diseases for children entering school for the first time. I exploit the staggered implementation of the laws across states to identify both the short-run impacts on health and long-term effects on educational attainment. First, I show that the mandatory school vaccination laws were very successful in reducing the incidence rates of the targeted diseases. There is less evidence that mortality rates were affected. Finally, I find sizable and positive effects on educational outcomes as measured by years of schooling and high school completion. The effect on educational attainment is twice as large for non-whites relative to whites.
    Keywords: school vaccinations, morbidity, health, educational attainment
    JEL: I18 I2 J13
    Date: 2012–02–20
  18. By: Zucchelli, E.;; Harris, M.;; Zhao, X.;
    Abstract: This paper employs a dynamic multinomial choice framework to provide new evidence on the effect of health on labour market transitions among older individuals. We consider retirement as a multi-state process and examine the effects of ill-health and health shocks on mobility between full-time employment, part-time employment, self-employment and inactivity. In order to disentangle the roles of unobserved individual heterogeneity and true state dependence, we estimate dynamic panel multinomial logit models with random effects, assuming a first order Markov process and accounting for the initial conditions problem. We also account for potential measurement error in the self-assessed health status by building a latent health stock model and employing measures of health shocks. Using data from the first nine waves of the (2001 - 2009) Household, Income and Labour Dynamics in Australia (HILDA) Survey, we find that both ill-health and health shocks greatly increase the probability of leaving full-time employment towards inactivity. We also find evidence of health-driven part-time and selfemployment paths into inactivity.
    Keywords: ill-health; health shocks; labour transitions; dynamic multinomial choice models
    JEL: C23 I10 J24
    Date: 2012–02
  19. By: Nakamura, R.;
    Abstract: Prevalence of overweight among children is at the top of health policy agenda in many developed countries. We study the causal effect of mothers' schooling on children's body weight. We exploit the 1972 schooling reform in England and Wales, which raised the minimum school leaving age from Fifteen to sixteen. Our regression-discontinuity estimates use Health Survey for England (1998-2002) and show that the extra year of schooling for mothers induced by the reform significantly reduces their son's weight. There is only insignificant negative effect for daughters. Additionally, we do not find that mothers' schooling improves children's health behaviour (fruit and vegetable consumption; exercising).
    Keywords: Overweight children; Schooling; Regression-discontinuity;
    JEL: I12 I20
    Date: 2012–02

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