nep-hea New Economics Papers
on Health Economics
Issue of 2012‒03‒08
27 papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Valuing Health Risk Changes Using a Life-Cycle Consumption Framework By Stephen C. Newbold
  2. Retirement intentions of older migrant workers: Does health matter? By Nicolas Gérard Vaillant; François-Charles Wolff
  3. Chronic Illnesses and Injuries: An Evaluation of their Impact on Occupation and Revenues By Emmanuel Duguet; Chr. Le Clainche
  4. The impact of health events on individual labor market histories : the message from difference in differences with exact matching By Emmanuel Duguet; Christine Le Clainche
  5. Health-insurance Coverage for Low-wage Workers, 1979-2010 and Beyond By John Schmitt
  6. Love, Toil, and Health Insurance: Why American Husbands Retire When They Do By Joshua Congdon-Hohman
  7. Average Household Size and the Eradication of Malaria By Lena Hulden; Ross McKitrick; Larry Hulden
  8. Incentives Beyond the Money and Motivational Capital in Health Care Organizations. By Mikel Berdud; Juan M. Cabasés Hita
  9. Wealthy, healthy, and wise: does money compensate for being born into difficult conditions? By James Manley; Lia Fernald; Paul Gertler
  10. Regulatory Enforcement, Politics, and Institutional Distance: OSHA Inspections 1990-2010 By Juergen Jung; Michael D. Makowsky
  11. Earnings Growth and Movements in Self-Reported Health By Halliday, Timothy
  12. Life, Death and World Inequality By Cordoba, Juan Carlos
  13. Use of Maternal Health Care in Tajikstan: A Bargaining Framework By Mieke Meurs; Lisa Giddings
  14. Cause-specific Neonatal Deaths: Levels, Trend and Determinants in Rural Bangladesh, 1987-2005 By Saha, U.R.; Soest, A.H.O. van; Bijwaard, G.E.
  15. Run For Fun: Intrinsic Motivation and Physical Performance By Filippin, A.; Ours, J.C. van
  16. Birth Spacing, Child Survival and Fertility Decisions: Analysis of Causal Mechanismsa By Soest, A.H.O. van; Saha, U.R.
  17. Does Family Planning Reduce Infant Mortality? Evidence from Surveillance Data in Matlab, Bangladesh By Soest, A.H.O. van; Saha, U.R.
  18. The implementor/adversarial algorithm for cyclic and robust scheduling problems in health-care By Matias Holte; Carlo Mannino
  19. An Economic Analysis of the Regulation of Pharmaceutical Markets. By [no author]
  20. Working-Age Adult Mortality, Orphan Status, and Child Schooling in Rural Zambia By Mather, David
  21. The effect of social security, health, demography and technology on retirement By Ferreira, Pedro Cavalcanti; Santos, Marcelo Rodrigues dos
  22. Effectiveness of cigarette tax in Japan By Kazuki Kamimura
  23. The Multipillar System for Health Care Financing: Thirteen Good Reasons for Open Capitalisation Funds, Covering both Pension and Health Care Provisions By Pammolli, Fabio; Salerno, Nicola
  24. Should Aid Reward Performance? Evidence from a Field Experiment on Health and Education in Indonesia By Benjamin A. Olken; Junko Onishi; Susan Wong
  25. Insurance as Delegated Purchasing: Theory and Evidence from Health Care By Robin McKnight; Jonathan Reuter; Eric Zitzewitz
  26. Effects of Medicare Payment Reform: Evidence from the Home Health Interim and Prospective Payment Systems By Peter J. Huckfeldt; Neeraj Sood; José J Escarce; David C. Grabowski; Joseph P. Newhouse
  27. Stimulating Demand for AIDS Prevention: Lessons from the RESPECT Trial By Damien de Walque; William H. Dow; Carol Medlin; Rose Nathan

  1. By: Stephen C. Newbold
    Abstract: Government agencies routinely use the “value of a statistical life” (VSL) in benefit-cost analyses of proposed environmental and safety regulations. Here I review an alternative approach for valuing health risks using a “life-cycle consumption framework.” This framework is based on an explicit individual-level lifetime utility function over health and income at all ages, and so could be used to examine any pattern of health risk changes over a person’s lifespan. I discuss several potential advantages of this framework, both positive and normative. From a positive perspective, this framework can support a functional benefit transfer approach that is more flexible and potentially more accurate than the standard point-value benefit transfer approach based on the VSL, and it can be used to evaluate mortality and morbidity effects simultaneously in an internally consistent model. From a normative perspective, it provides a natural foundation for a social welfare function and therefore could facilitate a unified evaluation of efficiency and equity, as a supplement to traditional benefit-cost analysis.
    Keywords: VSL, life-cycle model, benefit-cost analysis, social welfare analysis, QALY, health-wealth tradeoff
    JEL: I18 J17 Q51
    Date: 2011–04
  2. By: Nicolas Gérard Vaillant (LEM - Lille - Economie et Management - CNRS : UMR8179 - Université des Sciences et Technologies de Lille - Lille I - Fédération Universitaire et Polytechnique de Lille, Université Catholique de Lille - Université Catholique de Lille, ISTC - Institut des Stratégies et Techniques de Communication - Université Catholique de Lille); François-Charles Wolff (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272, INED - Institut National d'Etudes Démographiques Paris - INED)
    Abstract: This paper investigates the effect of self-assessed health on retirement plans of older migrants. As immigration is primarily associated with labor considerations, the role of economic incentives in the migration decision suggests that health could play a minor effect in immigrants' decision to retire. Using detailed data on immigrants living in France collected in 2003, we examine the role of health on early retirement intentions using simultaneous, recursive models that account for the fact that subjective health is potentially endogenous. Being in poor health increases the intention of migrant workers to retire early, but the subjective health outcomes have little influence on retirement plans.
    Keywords: Retirement intention ; self-assessed health ; immigrants ; France
    Date: 2012–02–17
  3. By: Emmanuel Duguet (ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris XII - Paris Est Créteil Val-de-Marne : EA437 - Université Paris Est Marne-la-Vallée); Chr. Le Clainche (LAMETA - Laboratoire Montpellierain d'économie théorique et appliquée - CNRS : UMR5474 - INRA : UR1135 - CIHEAM - Université Montpellier I - Montpellier SupAgro)
    Abstract: This paper investigates whether chronic illnesses and injuries have a significant impact on the individual's performance in the labor market. We use the "Santé et Itinéraires Professionnels" (SIP, "Health and Labor Market Histories") survey, conducted in France in 2006-2007. We use the propensity score method in order to evaluate the impact of chronic illnesses and accidents on labor market participation and earnings. We find that both health events have a negative effect on professional careers and earnings, and that accidents have a greater impact on women's earnings.
    Keywords: chronic illness, accident, labor
    Date: 2012–02–01
  4. By: Emmanuel Duguet (ERUDITE - Equipe de Recherche sur l'Utilisation des Données Individuelles Temporelles en Economie - Université Paris XII - Paris Est Créteil Val-de-Marne : EA437 - Université Paris Est Marne-la-Vallée); Christine Le Clainche (LAMETA - Laboratoire Montpellierain d'économie théorique et appliquée - CNRS : UMR5474 - INRA : UR1135 - CIHEAM - Université Montpellier I - Montpellier SupAgro)
    Abstract: We studied the effect of health events (accidents and chronic diseases) on the occupation probabilities at the individual level, while accounting for both correlated individual and time effects. Using difference-in-differences with exact matching estimators, we found that health events have a strong impact on individual labor market histories. The workers affected by a healt event have a stronger probability of entering inactivity and a lower probability of keeping their jobs. We also found that the less quali…ed workers, women, and workers with short term jobs are the most negatively affected by health events.
    Keywords: chronic illness, health, labor, difference in differences
    Date: 2012–02–01
  5. By: John Schmitt
    Abstract: This paper uses data from the Current Population Surveys for 1980 through 2011 to review trends in health-insurance coverage rates for low-wage workers (defined as workers in the bottom fifth of the wage distribution in each survey year). In 2010, over 38 percent of low-wage workers lacked health insurance from any source, up from 16 percent in 1979. The biggest reason for the decline in coverage is the erosion of employer-provided health insurance, either through a worker's own employer or as a dependent on another family member's employer-provided policy. Over the last three decades, the role of public insurance in providing coverage for low-wage workers has increased, though not nearly enough to offset the declines in private insurance. In 2010, about 10 percent of low-wage workers had coverage through Medicaid, double the share in 1979. While a great deal of uncertainty still surrounds the Affordable Care Act (ACA) and its likely impact on employers and workers, reasonable estimates based on consensus projections suggest that the ACA will have a substantial positive effect on health-insurance coverage rates for low-wage workers. Even so, the ACA will likely leave an important share of low-wage workers, especially low-wage Latino, African American, and Asian workers, as well as many immigrant workers, without coverage. At the same time, if the ACA is blocked – in the courts or in Congress – there is every indication that coverage rates for low-wage workers will continue their long, steady decline.
    Keywords: low-wage work, health insurance
    JEL: J I I1 I18
    Date: 2012–02
  6. By: Joshua Congdon-Hohman (Department of Economics, College of the Holy Cross)
    Abstract: Health insurance has previously been shown to be an important determinant of retirement timing among older Americans. While previous literature has largely ignored the inter-spousal dependence of health insurance benefits, this study examines the relationship of both spouses’ health insurance options to the household’s timing of the husband’s retirement. Using data from the Health and Retirement Study, I find that a wife’s health insurance options have an independent impact on the timing of her husband’s exit from the labor force. This impact is not distinguishable in magnitude to that of a husband’s own health insurance options. Differences for each spouse do arise when each spouse’s health is interacted with his or her health insurance options following a husband’s retirement. The impact of a wife’s health insurance needs on the timing of a husband’s retirement is dependent on her health while the impact of the husband’s insurance options is seemingly unrelated to his health. The omission of inter-spousal health insurance dependency may lead to an underestimation of the cost and the employment response to changes in the health insurance system from newly legislated health care reform.
    Keywords: Retirement, health insurance, household decision-making
    JEL: H55 J26 J32 J44
    Date: 2011–11
  7. By: Lena Hulden (Department of Agricultural Science,Helsinki University); Ross McKitrick (Department of Economics,University of Guelph); Larry Hulden (Finnish Museum of Natural History)
    Abstract: Efforts to eradicate malaria during the 20th century succeeded in some parts of the world but failed in others. Malaria also disappeared spontaneously in several countries for reasons that remain an enigma. The connection between malaria and poverty has long been noted. Here we focus on a specific aspect: household size, which has hitherto received little attention. We find strong evidence that when average household size drops below four persons, the probability of malaria eradication jumps dramatically and its incidence in the population drops significantly. This effect is independent of all commonly-studied explanatory variables and was globally valid across all climate zones irrespective of counter measures, vector species, or Plasmodium species. We propose an explanation based on the dispersal mechanism of the parasite. Malaria is transmitted at night by mosquito bite. The mosquito typically spreads the Plasmodium only locally over short distances to new human victims. To survive, the Plasmodium depends on infected humans making social contacts over longer distances. When household size decreases sufficiently, these contacts cross a threshold value that changes the balance between extinctions and replacements and the Plasmodium disappears on its own. We test this interpretation by contrasting our malaria model with dengue fever, which is also poverty-related and mosquito-borne but transmitted differently, namely through daytime exposure. Household size is uncorrelated with dengue incidence, whereas an indicator of outdoor work that is insignificant in the malaria model is highly significant for dengue. We conclude that poverty-induced malaria infection risks are likely to persist, but a focus on reducing effective household size can be a feasible and promising means of its eradication.
    Keywords: Malaria;dengue fever, household size, DDT
    JEL: I15 O18
    Date: 2012
  8. By: Mikel Berdud (Departamento de Economía-UPNA); Juan M. Cabasés Hita (Departamento de Economía-UPNA)
    Abstract: This paper explores the conditions that characterize the optimality for a principal (health manager) to undertake investments to motivate agents (doctors). In the model, doctors are intrinsically motivated and can have different identities. We develop a principal agent dynamical model with moral hazard, which captures the possibility of affecting doctors’ intrinsic motivation and identity through contracts offered by the health manager. Identity and intrinsic motivation of the doctor can be undermined (crowding-out) or enhanced (crowding-in) by incentive policies and monetary rewards. When motivations beyond the money play a role in the agents behaviour, the optimality of the equilibrium outcomes may be altered. Intrinsic motivation is defined as doctor’s experienced enjoyment from doing her work and commit toward a mission. By “full” identity we mean a situation in which the doctor shares the organizational objectives and views herself as a part of the organization. We assume that “full” identity can be achieved when health managers include mission supportive investments in contracts. This also crowds in intrinsic motivation. However, crowding out occurs when the health manager uses only pure monetary rewards to incentivize doctors with the goal of drive their actions in his own interest. Solving the model, we are allowed to make comparative statics and discuss the conditions under which spending resources to invest in motivational capital, is optimal for the health organization’s manager. Our results may help to inform policy-makers about optimal policy design and optimal management of health organizations. For instance, we conclude that investing in motivational capital is more likely to be profitable in the long run whereas mere monetary incentives are more likely to be optimal in the short run.
    Keywords: contracts, moral hazard, intrinsic motivation, crowding effects, mission, motivational capital
    JEL: C32 E30
    Date: 2012
  9. By: James Manley (Department of Economics, Towson University); Lia Fernald (School of Public Health, UC Berkeley); Paul Gertler (Haas School of Business, UC Berkeley)
    Abstract: Recent studies have linked transfers from Mexican conditional cash transfer program Oportunidades (formerly PROGRESA) to improvements in child development (Fernald, Gertler, and Neufeld 2008, 2009) but this work has been crit icized as failing to account for endogeneity of the transfers. We create an exogenous instrume nt for the amount of tran sfers and use it to test program and transfer effects. A pplying the new instrument confirms that improvements in child development are more linked to the transfers themselves than to other portions of the program, which involve medical checkups as well as educational sessions for mothers. We also find evidence that the program facilitates catch-up growth, a phenomenon of disputed importance in the health literature.
    Keywords: PROGRESA, Oportunidades, conditional cas h transfers, instrument al variables, child development, child health, Mexico.
    JEL: I12 O12 I38
    Date: 2012–02
  10. By: Juergen Jung (Department of Economics, Towson University); Michael D. Makowsky (Department of Economics, Towson University)
    Abstract: Using a dataset of over 1.6 million inspections by the Occupational Safety and Health Agency (OSHA) from 1990 through 2010, we explore the determinants of inspection and enforcement outcomes. OSHA is an institutionally split agency, with the federal agency conducting inspections in 25 states and state agencies conducting inspections in the remaining 25. The geographic variety and range over 21 years allows investigation into the institutional and political determinants of inspection outcomes, with particular attention to the fines levied by inspectors and the ability of firms to negotiate reductions in fines levied upon them. We find patterns of discretionary enforcement that are distinctly different in state and federally conducted inspections. State agencies are considerably more sensitive to local economic conditions than their federal counterparts, finding fewer standard violations and fewer serious violations as unemployment increases. Larger companies receive greater lenience on behalf of inspectors in multiple dimensions. The executive branch exerts greater influence than congress over inspection outcomes in both federal and state agencies. Inspector issued fines and final fines, after negotiated reductions, are both smaller during Republican presidencies. Quantile regression analysis reveals that the party of the president has its greatest impact on both the largest fines issues and the largest negotiated reductions in fines.
    Keywords: Regulation, Enforcement, Occupational Safety, Institutional Differences.
    JEL: K23 H73 I18
    Date: 2012–02
  11. By: Halliday, Timothy (University of Hawaii at Manoa)
    Abstract: We employ data from the Panel Study of Income Dynamics to investigate income to health causality. To account for unobserved heterogeneity, we focus on the relationship between earnings growth and changes in self-reported health status. Causal claims are predicated upon appropriate moment restrictions and specification tests of their validity. We find evidence of Granger-type causality running from income to health for married men but not for women or single men. These effects are more pronounced for younger men and the bottom quartile of the earnings distribution. The former may be the consequence of permanent earnings shocks, whereas the latter may be the consequence of job loss.
    Keywords: gradient, health, dynamic panel data models
    JEL: I0 I12 J1
    Date: 2012–02
  12. By: Cordoba, Juan Carlos
    Abstract: Life expectancy around the world has increased substantially since 1970. In contrast, consump-tion per capita has fallen in some countries, remained stagnant, or sharply increased in others.What are the welfare gains of the systematic increase in life expectancy around the world? Howdoes a "full measure" of per capita income, one that adjusts for life expectancy, compare tostandard measures of world inequality that only consider income? This paper documents howstandard models used to answer these questions give rise to a number of predictions that areinconsistent with well-documented evidence, particularly on the value of statistical life. It thenproposes a generalized model with non-separable preferences that exhibits a low elasticity ofintertemporal substitution and a low degree of mortality aversion. The non-separable modelreverts the counterfactual predictions of the standard model, and it also provides plausiblemeasures of changes in welfare and inequality around the world.
    Keywords: Welfare; life expectancy; value of statistical life; mortality risk aversion; Epstein-Zin-Weil pref- erences; AIDS.
    JEL: D J
    Date: 2012–03–01
  13. By: Mieke Meurs; Lisa Giddings
    Abstract: Post-socialist economic declines have included declines in women's use of maternal health care. This paper examines the use of maternal health care in Tajikistan, where such declines have occurred. The findings support previous evidence that women's use of services depends on women's education, household income, and proximity of services. Previous models have not specified who makes the care decision. Using education as a proxy for preferences, the findings show that women share decisionmaking with their spouse and the eldest female in the household. However, the data provides limited evidence that traditional proxies for bargaining power affect outcomes. The authors conclude that measures of bargaining power require tailoring to local conditions. Surveys evaluating the value of women's assets and their services in the home, as well as questions about decision-making, will allow researchers to more effectively measure bargaining power across contexts. The paper concludes with policy recommendations.
    Date: 2012–02
  14. By: Saha, U.R.; Soest, A.H.O. van; Bijwaard, G.E. (Tilburg University, Center for Economic Research)
    Abstract: Abstract: Reducing neonatal mortality is a particularly important issue in Bangladesh. We employ a competing risks model incorporating both observed and unobserved heterogeneity and allowing the heterogeneity terms for various causes to be correlated. Data come from the Health and Demographic Surveillance System (HDSS), Matlab. The results confirm the general conclusion on levels, trends and patterns of causes of neonatal deaths in the existing literature, but also reveal some remarkable socioeconomic differences in the risks of causespecific deaths. Deaths due to low birth weight and other causes (sudden infant death, unspecified or specified) are better explained from the socio- economic covariates than deaths due to neonatal infections or obstetric complications. The analysis highlights the role of maternal and child health interventions (particularly tetanus toxoid immunization for pregnant women, nutrition programs, and high coverage health services: distance to nearest health centre). Policies that increase quality and equity in child births may help to further reduce neonatal mortality.
    Keywords: millennium development goals;neonatal deaths;competing risks models;unobserved heterogeneity;Bangladesh.
    Date: 2012
  15. By: Filippin, A.; Ours, J.C. van (Tilburg University, Center for Economic Research)
    Abstract: Abstract: We use data from the 24-hours Belluno run which has the unique characteristic that participants are affiliated with teams and run for an hour. This allows us not only to study the individual relationship between age and performance but also to study group dynamics in terms of accessions to and separations from teams in a manner that closely resembles workers and firms when individual productivity would have been perfectly observable. From our analysis we conclude that individual performance goes down with age, although the speed-age gradient is rather at. Group performance goes down with age as well, but interestingly a counterbalancing force emerges, namely team dynamics that are driven by performance of runners who enter and leave.
    Keywords: Age;performance;attrition.
    JEL: J14 J24 J31
    Date: 2012
  16. By: Soest, A.H.O. van; Saha, U.R. (Tilburg University, Center for Economic Research)
    Abstract: Abstract: We jointly analyze infant mortality, birth spacing, and total fertility of children in a rural area in Bangladesh, using longitudinal data from the Health and Demographic Surveillance System (HDSS) in Matlab. To distinguish causal mechanisms from unobserved heterogeneity and reverse causality, we use dynamic panel data techniques. We compare the results in a treatment area with extensive health services and a comparison area with standard health services. Simulations using the estimated models show how fertility and mortality can be reduced by, for example, breaking the causal link that leads to a short interval after a child has died. Eliminating this effect would reduce fertility and increase birth intervals, resulting in a fall in mortality by 0.14 and 2.45 per 1000 live births in treatment and comparison area, respectively. The effects of the numbers of (surviving) boys and girls on birth spacing provide evidence of son preference: having more boys has a stronger effect on the birth interval than having more girls, though both effects are significantly positive. A simulation suggests that if families would behave as if their all children were sons, fertility levels would be reduced by 3.5% and 5.7% in the ICDDR,B and comparison areas, respectively.
    Keywords: child mortality;birth spacing;fertility;dynamic panel data models;Bangladesh.
    JEL: I15 J13 C33
    Date: 2012
  17. By: Soest, A.H.O. van; Saha, U.R. (Tilburg University, Center for Economic Research)
    Abstract: Abstract: Analyzing the effect of family planning on child survival remains an important issue but is not straightforward because of several mechanisms linking family planning, birth intervals, total fertility, and child survival. This study uses a dynamic model jointly explaining infant mortality, whether contraceptives are used after each birth, and birth intervals. Infant mortality is determined by the preceding birth interval and other covariates (such as socio-economic status). The decisions about using contraceptives after each birth are driven by similar covariates, survival status of the previous child, and the family’s gender composition. Birth spacing is driven by contraceptive use and other factors. We find favourable effects of contraceptive use, reducing infant deaths in second and higher order births. Because the mortality risks for first-borns is higher than for later births and contraceptive use reduces the number of higher order births, the net effect on the total infant mortality rate is small.
    Keywords: child mortality;family planning;contraceptive use;demography;dynamic panel data models;Bangladesh.
    JEL: I1 J13 C33
    Date: 2012
  18. By: Matias Holte (SINTEF ICT, Norway Dept. of Applied Mathematics); Carlo Mannino (Dipartimento di Informatica e Sistemistica "Antonio Ruberti" Sapienza, Universita' di Roma)
    Abstract: A general problem in health-care consists in allocating some scarce medical resource, such as operating rooms or medical staff, to medical specialties in order to keep the queue of patients as short as possible. A major difficulty stems from the fact that such an allocation must be established several months in advance, whereas the exact number of patients for each specialty is an uncertain parameter. Another problem arises for cyclic schedules, where the allocation is defined over a short period, e.g. a week, and then repeated during the time horizon. Even if the demand is perfectly known in advance, the number of patients may vary from week to week. We model both the uncertain and the cyclic allocation problem as adjustable robust scheduling problems. We develop a row and column generation algorithm to solve this problem: this turns out to be the implementor/adversarial algorithm for robust optimization recently introduced by Bienstock for portfolio selection. We apply our general model to compute master surgery schedules for a real-life instance from a large hospital in Oslo.
    Keywords: Health-care optimization, Master surgery scheduling, Robust optimization, Mixed-integer programming
    Date: 2011
  19. By: [no author]
    Abstract: Regulation in pharmaceutical markets is pervasive in most countries, especially in Europe. The nature of existing regulations is diverse, as they serve a number of purposes: guaranteeing safety, efficacy and security of drug usage; but also ensuring patients access to treatment, preserving affordability and fostering pharmaceutical innovation. A number of regulatory interventions are purposely designed to bring about more efficient pharmaceutical markets. These interventions are ultimately intended to increase welfare for patients today and patients tomorrow. Welfare today requires ensuring patients access to existing pharmacological treatment at an affordable cost. Welfare tomorrow requires ensuring a continued effort on research and development to produce pharmaceutical innovations that respond to currently unmet medical needs. The chapters of this thesis focus on a number of regulatory interventions that attract notable attention due to their effect on access, affordability and innovation. These include the regulation of pharmaceutical parallel trade, direct-to-consumer advertising of prescription drugs and off-patent pharmaceutical markets. By assessing the impact of public interventions on market outcomes and patients welfare, this thesis aims at contributing to the debate about optimal regulation of pharmaceutical markets.
    Date: 2012
  20. By: Mather, David
    Abstract: During the last decade, the Zambian government has dramatically increased expenditures on primary and secondary schooling, and enrollment rates have risen dramatically. At the same time, Zambia has faced the challenge of rising HIV prevalence and the possibility that recent gains in long-term human capital development could be eroded if households which suffer the death of a working-age (WA) adult pull their children out of school due to family labor shortages or financial constraints. This paper uses panel survey data from rural Zambia to measure the impact of WA adult mortality and morbidity on primary school attendance and school advancement, and separately tests the extent to which orphan status affects these schooling outcomes. There are five principal findings from our analysis.
    Keywords: Zambia, Adult Mortality, Orphan, Schooling, Community/Rural/Urban Development, Food Security and Poverty, Health Economics and Policy,
    Date: 2011–11
  21. By: Ferreira, Pedro Cavalcanti; Santos, Marcelo Rodrigues dos
    Abstract: This article studies the determinants of the labor force participation of the elderlyand investigates the factors that may account for the increase in retirement in thesecond half of the last century. We develop a life-cycle general equilibrium modelwith endogenous retirement that embeds Social Security legislation and Medicare. In-dividuals are ex ante heterogeneous with respect to their preferences for leisure andface uncertainty about labor productivity, health status and out-of-pocket medical ex-penses. The model is calibrated to the U.S. economy in 2000 and is able to reproducevery closely the retirement behavior of the American population. It reproduces thepeaks in the distribution of Social Security applications at ages 62 and 65 and the ob-served facts that low earners and unhealthy individuals retire earlier. It also matchesvery closely the increase in retirement from 1950 to 2000. Changes in Social Securitypolicy - which became much more generous - and the introduction of Medicare accountfor most of the expansion of retirement. In contrast, the isolated impact of the increasein longevity was a delaying of retirement.
    Date: 2012–02–24
  22. By: Kazuki Kamimura (Keio University)
    Abstract: In this paper, we estimate the relationship between cigarette tax (price) and smoking behavior in Japan. We breaks smoking behavior into participation part and conditional demand part. With Keio Household Panel Survey (KHPS), we can identify the effect of cigarette price depending on intertempporal variation of cigarette price. Main results are as follows. First, effect of cigarette price is considerable and negative as expected. Particularly in case of male, cigarette price work on both participation and consumption. Thus cigarette tax increase is possible policy alternative to lower the smoking prevalence rate in Japan though decrease of tax revenue is not negligible. Second, effect of large tax increase in October 2010 is not as expected based on past performance. With various specification, effect of large tax increase in October 2010 is smaller than that of modest tax increase in July 2006 in estimates. This result implies accumulated effect of repeating modest cigarette tax increase is larger than effect of large cigarette tax increase even if total increment of cigarette price is the same. Third, there is considerable gender difference of sensitivity to cigarette price. While estimates in participation equation seems almost the same, elasticity differs a lot. In addition, consumption elasticities of male is by far larger than those of female. Thus for most of female, alternatives are smoking as in the past or quit smoking when confronting the cigarette tax increase. Fourth, there is strong evidence for recent anti-smoking trend in Japan. Though our proxy is how many years have passed since the enforcement of Health Promotion Law and thus somehow inaccurate, including the variable considerable change the estimates of cigarette price and is itself significant. Therefore, to explore how cigarette tax works in recent Japan, how to control the anti-smoking trend is unavoidable issue. Additionally we seek to obtain more reliable elasticities with various specifications. When we use dataset consists of who has ever smoked in recent years, elasticities seem most trustworthy.
    Date: 2012–03
  23. By: Pammolli, Fabio; Salerno, Nicola
    Abstract: CeRM recommendation for creating a new tool, the Open Welfare Funds: open funds based on real capitalisation of contributions, dedicated to both pension and health care provisions, and linked to collective insurance coverage against major health risks (first of all lack of self-sufficiency) Within welfare systems, health care is the expenditure that poses the most urgent problems for long term sustainability. Without policy interventions and structural reforms, its physiological tendency towards increases over Gdp will inevitably require access restrictions and cutting off of demand for services. This paper highlights the need to renew the current health care financing scheme. In the presence of ageing populations and rising incidences of health care expenditures over Gdp, this scheme cannot remain fully in charge of the working income of active people (pay-as-you-go), if we want to avoid depressive effects on employment, investments and productivity. Such effects, besides hampering economic growth, would have a negative impact on health care itself, with resources becoming more and more scarce with respect to needs. The financing scheme must become multipillar, with pay-as-you-go complemented by a private channel based on the real capitalisation of contributions. This channel would be capable of allocating savings, supporting productive investments and generating resources to be dedicated to health care. The best structuring and concrete functioning of the private pillar is less clear and under discussion. This position paper puts forward an operational proposal: the open capitalisation fund for welfare should offer both pension and health care provisions through real accumulation of contributions on individual accounts, and should be linked to collective insurance coverage against major risks and lack of self-sufficiency. This tool presents numerous positive characteristics, compared to the public pay-as-you-go monopillar as well as to a multipillar system in which the private component consists exclusively or mainly of insurance contracts. In fact, it is necessary to restrict the recourse to pure insurance coverage only to a limited group of treatments, because this kind of coverage is not equipped to deal with the dynamics of future expenses. As the difficulties American insurance companies are experiencing demonstrate, the pure insurance coverage ends up with the recurrence, in the private area, of the same defects as the pay-as-you-go in the public health care systems. Insurance pooling is not but a pay-as-you-go scheme applied over the group of insured members.
    Keywords: public finances sustainability; pensions; health care provisions; long-term care; assistance for the elderly; pay-as-you-go; capitalization; monopillar; multipillar; bismark; beveridge; public; private; diversification of expenditures; diversification od sources of financing
    JEL: H53 I00 H00
    Date: 2011
  24. By: Benjamin A. Olken; Junko Onishi; Susan Wong
    Abstract: This paper reports an experiment in over 3,000 Indonesian villages designed to test the role of performance incentives in improving the efficacy of aid programs. Villages in a randomly-chosen one-third of subdistricts received a block grant to improve 12 maternal and child health and education indicators, with the size of the subsequent year’s block grant depending on performance relative to other villages in the subdistrict. Villages in remaining subdistricts were randomly assigned to either an otherwise identical block grant program with no financial link to performance, or to a pure control group. We find that the incentivized villages performed better on health than the non-incentivized villages, particularly in less developed areas, but found no impact of incentives on education. We find no evidence of negative spillovers from the incentives to untargeted outcomes, and no evidence that villagers manipulated scores. The relative performance design was crucial in ensuring that incentives did not result in a net transfer of funds toward richer areas. Incentives led to what appear to be more efficient spending of block grants, and led to an increase in labor from health providers, who are partially paid fee-for-service, but not teachers. On net, between 50-75% of the total impact of the block grant program on health indicators can be attributed to the performance incentives.
    JEL: I15 I25 O38
    Date: 2012–03
  25. By: Robin McKnight; Jonathan Reuter; Eric Zitzewitz
    Abstract: Household demand for actuarially unfair insurance against small risks has long puzzled economists. One way to potentially rationalize this demand is to recognize that (non-life) insurance is an incentive-compatible means of engaging an expert buyer. To quantify the benefits of expert buying, we compare prices paid by the insured and uninsured for health care. In categories of health care where uncompensated care is more difficult to obtain (drugs, doctor office visits, and hospital outpatient visits), we find that insurers pay 10-20% less than the uninsured. For forms of care where payment by the uninsured is more likely to be negotiated after services are rendered (hospitalizations and emergency room visits) the uninsured pay about 30% less on average, due largely to the nontrivial share of uninsured who pay 5% or less of their billed charges. At least in settings where free services are difficult to obtain, expert buying is an important benefit of insurance. We discuss the implications of the delegated-purchasing view of insurance for con-sumer-driven health insurance and for self-insurance by employers.
    JEL: G22
    Date: 2012–02
  26. By: Peter J. Huckfeldt; Neeraj Sood; José J Escarce; David C. Grabowski; Joseph P. Newhouse
    Abstract: Medicare continues to implement payment reforms that shift reimbursement from fee-for-service towards episode-based payment, affecting average and marginal reimbursement. We contrast the effects of two reforms for home health agencies. The Home Health Interim Payment System in 1997 lowered both types of reimbursement; our conceptual model predicts a decline in the likelihood of use and costs, both of which we find. The Home Health Prospective Payment System in 2000 raised average but lowered marginal reimbursement with theoretically ambiguous effects; we find a modest increase in use and costs. We find little substantive effect of either policy on readmissions or mortality.
    JEL: H42 I1
    Date: 2012–02
  27. By: Damien de Walque; William H. Dow; Carol Medlin; Rose Nathan
    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 aren’t easily monitored, such as stopping drug abuse. These strategies have not been used in the sexual domain, so we assess how incentives can be used to reduce risky sexual behavior. After discussing theoretical pathways, we discuss 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 over 90% of participants viewing the incentives favorably. After one year, 57% of enrollees in the “low-value” reward arm stated that the cash rewards “very much” motivated sexual behavioral change, rising to 79% in the “high-value” reward arm. Despite its controversial nature, we argue for further testing of such incentive-based approaches to encouraging reductions in risky sexual behavior.
    JEL: I12 I15
    Date: 2012–02

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