nep-hea New Economics Papers
on Health Economics
Issue of 2012‒10‒20
seventeen papers chosen by
Yong Yin
SUNY at Buffalo, USA

  1. Don't Stress: Early Life Conditions, Hypertension, and Selection into Associated Risk Factors By Mark E McGovern
  2. Organic Food and Human Health: Instrumental Variables Evidence By Heinz Welsch
  3. Indebted and Overweight: The Link Between Weight and Household Debt By Averett, Susan L; Smith, Julie K.
  4. Work ‘til You Drop: Short- and Longer-Term Health Effects of Retirement in Europe By Sahlgren, Gabriel H.
  5. Classifying OECD healthcare systems: A deductive approach By Böhm, Katharina; Schmid, Achim; Götze, Ralf; Landwehr, Claudia; Rothgang, Heinz
  6. An analysis of physical and monetary losses of environmental health and natural resources in India By Mani, Muthukumara; Markandya, Anil; Sagar, Aarsi; Strukova, Elena
  7. Personality and the Education-Health Gradient By Conti, Gabriella; Hansman, Chris
  8. Sick Leaves: Understanding Disparities Between French Departments By Mohamed Ali Ben Halima; Thierry Debrand; Camille Regaert
  9. Adverse selection in a community-based health insurance scheme in rural Africa: implications for introducing targeted subsidies. By Parmar, Divya; Souares, Aurélia; de Allegri, Manuela; Savadogo, Germain; Sauerborn, Rainer
  10. Quality Assurance Policies and Indicators for Long-Term Care in the European Union. By Fermon, Beatrice; Joël, Marie-Eve
  11. A Pint for a Pound? Reevaluating the Relationship Between Minimum Drinking Age Laws and Birth Outcomes By Alan I. Barreca; Marianne E. Page
  12. Rural Health Infrastructures in the North-East India By Saikia, Dilip; Das, Kalyani Kangkana
  13. Health, Human Capital Formation and Knowledge Production: Two Centuries of International Evidence By Jakob Madsen
  14. The Impact of the Partnership Long-term Care Insurance Program on Private Coverage and Medicaid Expenditures By Haizhen Lin; Jeffrey T. Prince
  15. Protecting the Lives of Women and Children: an Innovative Approach to Addressing the Problem of Female Genital Mutilation through Social Change, Public Health and Youth Development in a Fragile Region By Masresha Andarge; Mieke van Riet; Patrick Martens
  16. Life expectancy and quality of life adjusted in years induced by good health care By Jan Worst
  17. Still unequal at birth: birth weight, socioeconomic status and outcomes at age 9 By Mark E. McGovern

  1. By: Mark E McGovern (University College Dublin)
    Abstract: Early life conditions have been linked to various domains of later life health, including cardiovascular outcomes. Using life history data from 13 European countries, I find that childhood socioeconomic status and measures of childhood health are related to hypertension, although there is cross country heterogeneity in these effects. I account for potential omitted variable bias by using aggregate mea- sures of public health at birth, which are plausibly exogenous to the individual. I findnd that infant mortality at birth is positively related to hypertension, even allowing for cohort effects, and control- ling for GDP at birth. Results imply that improvements in early life conditions in Europe led to an overall reduction in the hypertension rate of between 3 and 6 percentage points, for the cohort born 1931-1935, relative to the cohort born 1956-1960. An alternative strand of literature in epidemiology links contemporaneous factors, such as work place environment, to heart disease. However, theories of life cycle decision making suggest that individuals may be selected into these adverse environments and behaviours on the basis of their initial conditions. I demonstrate a strong association between early environment and these risk factors. Results imply that these should therefore be viewed as outcomes which lie on the causal pathway between initial conditions and later outcomes, in which case ignoring this selection will misattribute at least part of the effects of early life environment to current circumstance. This has important policy implications for targeting hypertension as it indi- cates that emphasis should also be placed on combatting disadvantage across the life course, rather than just factors which only manifest themselves in adulthood.
    Keywords: Early Life Conditions, Hypertension, Work Stress, Infant Mortality, Health Behaviour
    JEL: I12 I14 N34 J11
    Date: 2012–10–12
  2. By: Heinz Welsch (University of Oldenburg, Department of Economics)
    Abstract: Organic food markets in developed countries have been rapidly expanding in recent years. Though expected health benefits are a major motive for buying organic food (OF), the health effects of consuming OF are uncertain. This study uses survey data from Germany, 2007, to explore the causal relationship between OF consumption and self-rated health status. While it finds strong and statistically significant relationships between health and indicators of the intensity and duration of OF consumption, these relationships vanish when OF consumption is instrumented by respondents’ assessment of the necessity of renewable energy. Since the instrument satisfies usual validity standards, these findings suggest that the OF-health relationship may be spurious due to common unobserved factors, in particular a health-oriented lifestyle.
    Keywords: health; food; consumption; organic agriculture
    JEL: I12 D12 Q13
    Date: 2012–10
  3. By: Averett, Susan L (Lafayette College); Smith, Julie K. (Lafayette College)
    Abstract: There is a substantial correlation between household debt and bodyweight. Theory suggests that a causal relationship between debt and bodyweight could run in either direction or both could be caused by unobserved common factors. We use OLS and Propensity Score Matching to ascertain if household debt (measured by credit card indebtedness and having trouble paying bills) is a potential cause of obesity. We find a strong positive correlation between debt and weight for women but this seems driven largely by unobservables. In contrast, men with trouble paying their bills are thinner and this is robust to various specification checks.
    Keywords: obesity, credit card debt, propensity score matching
    JEL: I10 I12 I14
    Date: 2012–10
  4. By: Sahlgren, Gabriel H. (Research Institute of Industrial Economics (IFN))
    Abstract: Declining fertility rates and increasing life expectancy necessitate a higher labor participation rate among older people in order to sustain pension systems and boost economic growth. At the same time, researchers have only recently begun to pay attention to the health effects of a longer working life, with rather mixed results thus far. Utilizing panel data from eleven European countries, and two distinct identification strategies to deal with endogeneity, we provide new evidence of the health effects of retirement.In contrast to prior research, we analyze both the impact of being retired and the effect of spending longer time in retirement. Using spouses’ characteristics as instruments, while taking precautions to ensure validity, we find a robust, negative impact of being retired and spending longer time in retirement on selfassessed, general, mental and physical health.In addition, we show that the impact on selfassessed health remains similar in models using instruments from previous research while also including individual- and time-fixed effects to remove time-invariant unobserved heterogeneity between individuals as well as common health shocks.Overall, the results suggest that this innovation and the fact that we take lagged effects into account explain the differences in comparison to prior multi-country research using these instruments. While the short-term health impact of retirement in Europe remains uncertain, the medium- to long-term effects appear to be negative and economically large.
    Keywords: Health; Retirement; SHARE; SHARELIFE
    JEL: I10 J14 J26
    Date: 2012–09–27
  5. By: Böhm, Katharina; Schmid, Achim; Götze, Ralf; Landwehr, Claudia; Rothgang, Heinz
    Abstract: This paper is a first attempt to classify 30 OECD healthcare systems according to a typology developed by Rothgang et al. (2005) and elaborated by Wendt et al. (2009). The typology follows a deductive approach. It distinguishes three core dimensions of the healthcare system: regulation, financing, and service provision. Moreover, three types of actors are identified based on long-standing concepts in social research: the state, societal actors, and market participants. Uniform or ideal-type combinations unfold if all dimensions are dominated by the same actor, either belonging to the state, society, or the market. Further, we argue, there is a hierarchical relationship between the dimensions of the healthcare system, led by regulation, followed by financing, and last service provision, where the superior dimension restricts the nature of the subordinate dimensions. This hierarchy limits the number of theoretically plausible healthcare system types within the logic of the deductive typology. The classification of 30 countries according to their most recent institutional setting results in five healthcare system types: the National Health Service, the National Health Insurance, the Social Health Insurance, the Etatist Social Health Insurance, and the Private Health System. Of particular relevance are the National Health Insurance and the Etatist Social Health Insurance both of which include countries that have often provoked caveats when allocated to a specific family of healthcare systems. Moreover, Slovenia stands out as a special case. The findings are discussed with respect to alternative taxonomies, explanatory factors for the position of single countries and most likely trends. -- Dieses Paper ist ein erster Versuch 30 OECD-Gesundheitssysteme anhand einer Typologie zu klassifizieren, die von Rothgang et al. (2005) vorgestellt und von Wendt et al. (2009) weiterentwickelt wurde. Im Gegensatz zu bestehenden Taxonomien folgt diese Typologie einem deduktiven Ansatz. Sie unterscheidet zwischen den drei Kerndimensionen eines Gesundheitssystems: Regulierung, Finanzierung und Leistungserbringung. Darüber hinaus werden auf Grundlage bestehender sozialwissenschaftlicher Konzepte drei Akteure unterschieden: Staat, gesellschaftliche Akteure und Marktteilnehmer. Idealtypische Konstellationen treten auf, wenn alle Dimensionen vom gleichen Akteur (Staat, Gesellschaft oder Markt) dominiert werden. Wir argumentieren zudem, dass es eine hierarchische Beziehung zwischen den drei Dimensionen gibt. Dabei nimmt die Regulierung die übergeordnete Stellung ein, gefolgt von der Finanzierung und schließlich der Leistungserbringung, wobei die Ausprägung vorrangiger Dimensionen die Ausgestaltungsoptionen der nachrangingen limitiert. Diese Hierarchie reduziert die Zahl der theoretisch plausiblen Gesundheitssystemtypen im Rahmen des deduktiven Ansatzes. Die Klassifizierung von 30 OECD-Ländern anhand ihrer gegenwärtigen institutionellen Ausprägungen führt zu fünf Gesundheitssystemtypen: Nationaler Gesundheitsdienst, nationales Krankenversicherungssystem, Sozialversicherungssystem, etatistisches Sozialversicherungssystem und privates Gesundheitssystem. Von besonderer Bedeutung sind die Typen nationales Krankenversicherungssystem und etatistisches Sozialversicherungssystem da beide in Staaten auftreten, deren Zuordnung zu bestimmten Gesundheitssystemtypen bisher umstritten war. Darüber hinaus sticht Slowenien als Ausnahmefall aus dem Ländersample hervor. Die Ergebnisse werden im Hinblick auf alternative Typologien, mögliche Erklärungsfaktoren für die Einordung einzelner Länder und wahrscheinliche Entwicklungstrends diskutiert.
    Date: 2012
  6. By: Mani, Muthukumara; Markandya, Anil; Sagar, Aarsi; Strukova, Elena
    Abstract: This study provides estimates of social and financial costs of environmental damage in India from three pollution damage categories: (i) urban air pollution; (ii) inadequate water supply, poor sanitation, and hygiene; and (iii) indoor air pollution. It also provides estimates based on three natural resource damage categories: (i) agricultural damage from soil salinity, water logging, and soil erosion; (ii) rangeland degradation; and (iii) deforestation. The estimates are based on a combination of Indian data from secondary sources and on the transfer of unit costs of pollution from a range of national and international studies. The study estimates the total cost of environmental degradation in India at about 3.75 trillion rupees (US$80 billion) annually, equivalent to 5.7 percent of gross domestic product in 2009, which is the reference year for most of the damage estimates. Of this total, outdoor air pollution accounts for 1.1 trillion rupees, followed by the cost of indoor air pollution at 0.9 trillion rupees, croplands degradation cost at 0.7 trillion rupees, inadequate water supply and sanitation cost at around at 0.5 trillion rupees, pasture degradation cost at 0.4 trillion rupees, and forest degradation cost at 0.1 trillion rupees.
    Keywords: Health Monitoring&Evaluation,Environmental Economics&Policies,Population Policies,Brown Issues and Health,Climate Change Mitigation and Green House Gases
    Date: 2012–10–01
  7. By: Conti, Gabriella; Hansman, Chris
    Abstract: We test the robustness of the results of Cutler and Lleras-Muney (2010) on the role of personality in explaining the education-health gradient by using alternative measures of child personality available in the National Child Development Study. We show that, alternatively to the authors conclusions, personality contributes to the education-health gradient to an extent nearly as large as that of cognition.
    Date: 2012–10–02
  8. By: Mohamed Ali Ben Halima (IRDES Institute for research and information in health economics); Thierry Debrand (IRDES Institute for research and information in health economics); Camille Regaert (IRDES Institute for research and information in health economics)
    Abstract: The purpose of this publication is to better understand disparities between the proportions of sick leaves granted among various departments in France. The Hygie database was used for this study. It was created by merging a number of administrative files of employees in the private sector in France in 2005. This database allows for the determination of «employer/employee» relations, the impact of the characteristics of firms on the health of their employees and the interactions between health and work. After briefly reviewing the various determinants for the effect of composition and the effect of context, as well as sick leaves and their importance for understanding geographic differences, we present a three-phase empirical analysis: a descriptive analysis to detect differences between departments, a multivariate analysis to highlight explanatory factors of probability of being on sick leave and, finally, an analysis of determinants of differences between departments. Our different models explain a significant portion of the disparities between departments. The effects of composition and effects of context account for approximately two-thirds of the mean squared error. The variables describing the medical supply (density of general practitioners), monitoring by National Health Insurance and patient age when the professional career began best explain the disparities between departments concerning sick leave. In contrast to other compositions or contexts included in our model, the percentage of sick leaves verified and the density of general practitioners are important factors with respect to health policies. Our research shows that they could be used as public policy instruments aimed at reducing geographic disparities.
    Keywords: Sick leave, Geographic disparities, Effect of context, Effect of composition, Absenteeism.
    JEL: I18 J21 J29 C25
    Date: 2012–10
  9. By: Parmar, Divya; Souares, Aurélia; de Allegri, Manuela; Savadogo, Germain; Sauerborn, Rainer
    Abstract: Background Although most community-based health insurance (CBHI) schemes are voluntary, problem of adverse selection is hardly studied. Evidence on the impact of targeted subsidies on adverse selection is completely missing. This paper investigates adverse selection in a CBHI scheme in Burkina Faso. First, we studied the change in adverse selection over a period of 4 years. Second, we studied the effect of targeted subsidies on adverse selection. Methods The study area, covering 41 villages and 1 town, was divided into 33 clusters and CBHI was randomly offered to these clusters during 2004–06. In 2007, premium subsidies were offered to the poor households. The data was collected by a household panel survey 2004–2007 from randomly selected households in these 33 clusters (n = 6795). We applied fixed effect models. Results We found weak evidence of adverse selection before the implementation of subsidies. Adverse selection significantly increased the next year and targeted subsidies largely explained this increase. Conclusions Adverse selection is an important concern for any voluntary health insurance scheme. Targeted subsidies are often used as a tool to pursue the vision of universal coverage. At the same time targeted subsidies are also associated with increased adverse selection as found in this study. Therefore, it’s essential that targeted subsidies for poor (or other high-risk groups) must be accompanied with a sound plan to bridge the financial gap due to adverse selection so that these schemes can continue to serve these populations.
    Date: 2012
  10. By: Fermon, Beatrice; Joël, Marie-Eve
    Abstract: Quality assurance policies for long-term care in France are founded on a law passed in 2002, but the organisation of the system is still underway. It is principally based on a legal framework that sets out requirements for quality monitoring and quality improvement. Quality assessment is related to outcomes, indicators and guidelines. It pertains to formal care and is related to administrative authorisation and financial conditions. In the public sector, the aim is to develop continuous quality assurance in a system differentiated by internal and external quality assessment. In the private sector, the aim is mainly to check conformity with quality standards, as internal and external quality assurance may be replaced by a certification procedure. A central agency is in charge of enhancing quality through the production of new guidelines but quality supervision is the role of the funding institution and qualitative results are not publicly available. To date, not many organisations or units have conducted the entire quality assurance process, as the quality of long-term care is ensured by an institutional system that is in the final stages of being structured.
    Keywords: Long-term care; assurance policies;
    JEL: I11 I38 J14
    Date: 2012–04
  11. By: Alan I. Barreca (Department of Economics, Tulane University); Marianne E. Page (Department of Economics, University of California, Davis)
    Abstract: Previous research documents a substantive, positive, correlation between the minimum legal drinking age (MLDA) and birth outcomes. Using an improved empirical framework, we reach a different conclusion: there is little or no relationship between the minimum legal drinking age and the health of infants born to young mothers. We do, however, find that MLDA policies are associated with the sex ratio at birth. Our estimates suggest that raising the MLDA may reduce fetal losses.
    Keywords: alcohol, minimum drinking age, infant health, birthweight, fetal death
    JEL: I18 J13
    Date: 2012–10
  12. By: Saikia, Dilip; Das, Kalyani Kangkana
    Abstract: Health is considered as an important dimension of human development. Good health is not only a prerequisite for well-being it also augments labour productivity and stimulates economic growth. While a well developed health infrastructure is crucial for attaining good health of the people, the health infrastructure in India is quite unsatisfactory. The National Rural Health Mission (NRHM) launched by the Government of India in 2005 has emphasized on strengthening rural health infrastructure including physical infrastructure, manpower and other facilities. In this light the present study reviews the status of rural health infrastructure in the North-East India. This has been done by examining the progress in health infrastructure and health care facilities, the status manpower and the quality of health care services in the rural areas across the north-eastern States. The findings suggest that after the implementation of NRHM in 2005 though there has been significant improvement in the rural health infrastructure, especially in case of health centres, the condition of the region has been atrocious in terms of other components of health infrastructure, especially in terms of quality of health care services and availability of Specialists and well trained manpower.
    Keywords: Health; rural health infrastructure; North-East India
    JEL: H51 H75 I1
    Date: 2012–09
  13. By: Jakob Madsen
    Abstract: Recent medical research shows that health is highly influential for learning and the ability to think laterally; however, past economic studies have failed to empirically examine the influence of health on learning, schooling, and ideas production; the main drivers of growth in endogenous growth models. This paper constructs a measure of health-adjusted educational attainment among the working age population based on their health status during the time they did their education. Using annual data for 21 OECD countries over the past two centuries it is shown that health has been highly influential for the quantity and quality of schooling, innovations and growth.
    JEL: O1 O2 O4
    Date: 2012–10
  14. By: Haizhen Lin (Department of Business Economics and Public Policy, Indiana University Kelley School of Business); Jeffrey T. Prince (Department of Business Economics and Public Policy, Indiana University Kelley School of Business)
    Abstract: We examine the impact of U.S. states’ adoption of the partnership long-term care (LTC) insurance program on households’ purchases of private coverage. This program increases benefits of privately insuring via a higher asset threshold for Medicaid eligibility for LTC coverage, and targets middle-class households. We find the program generates few new purchases of LTC insurance, and those it generates are almost entirely by wealthy individuals, as predicted by Medicaid crowd-out. Further analysis suggests that awareness levels of the program, along with bequest intentions, also effectively predict response rates, but Medicaid crowd-out persists. We provide an estimate of expected Medicaid savings/costs.
    JEL: I1
    Date: 2012–04
  15. By: Masresha Andarge; Mieke van Riet (Maastricht School of Management, the Netherlands); Patrick Martens (Maastricht School of Management, the Netherlands)
    Abstract: The practice of Female Genital Mutilation (FGM) is a common traditional practice among the Afar communities of Eastern Ethiopia. FGM, as well as other harmful traditional practices, including early marriage, face branding with sharp tools and abduction, are common among the Afar communities of Eastern Ethiopia. This has been threatening the lives of women and children and remains very prevalent. The practice of FGM, although now illegal in Ethiopia, continues and has been sustained by deep-rooted cultural values and habits. Despite world wide publicity and attention, FGM has proved to be difficult to eradicate. The problems in Dawe district are exacerbated by poor health service coverage and high maternal and child mortality rates caused by a variety of health-related factors. The region is in general underdeveloped and remote from the major towns and cities. That FGM seriously violates women’s and girl’s sexual rights as well as being harmful to the health of any woman is now well-established fact. The traditional thinking in the Afar communities, however, forces women to want and undergo the practice without questioning. This situation is not unique to Dawe in Ethiopia: even after more than 25 years of effort to reduce FGM, there is still a limited understanding of the practice, and the success and fail-factors in the approaches used. Results of interventions are variable, and to some, are disappointing considering the large efforts dedicated to erasing this practice. Studies find that in certain communities, reported FGM numbers are still as high as 80-100% of all females (WHO, 2010). The Afar Women Support Project (AWSP), implemented by the Ethiopian NGO, ‘Action for Integrated Sustainable Development Association’ (AISDA), is assessed as a relevant case study in this paper. The AWSP received funding from the Dutch SK Foundation following an initial incubation of the project design in an educational program at the Maastricht School of Management (MSM). The design phase started with comprehensive problem identification leading to detailed planned in a combination of implementation strategies encompassing ‘hard’ medical training, including the provision of basic kits for improved child delivery services for Traditional Birth Attendants (TBAs), and ‘soft’ measures focused on achieving attitude change through integrated community development and mass mobilization using different communication strategies appropriate to the local setting. The project was launched immediately after the signing of an operational agreement with the main stakeholders of the regional state in consultation with Disaster Prevention, Preparedness and Food Security Programs Coordination Bureau (DPPFSPCB), Women, Children and Youth Affairs Bureau (WCYAB), Bureau of Health (BoH). Religious and clan leaders were involved as important stakeholders whose support and participation proved vital. A specific component was targeted at youth and schools where the future momentum for lasting change will come from. The project implementation approach was based on stakeholder participation throughout and undergirded by application of a rigorous project methodology – ‘Project Cycle Management.’ This paper critically examines the activities and results of the AWSP drawing conclusions from the wide-ranging project activities and distilling lessons for the future. Also, some recent relevant literature on FGM is traversed given the increasing attention to attitude and behavior change as key factors in overcoming health and education related problems in overcoming poverty. In this regard, it is argued that the AWSP’s activities and results provide an important contribution to the field, particularly concerning appropriate strategies to overcome deeply engrained, but harmful cultural norms and traditions.
    Date: 2012–09
  16. By: Jan Worst (Maastricht School of Management, the Netherlands)
    Abstract: New technology, pharmaceutical research and therapy development between 2000 and 2005 have contributed to increase globally life expectancy with five years according to the WHO report 2008. Increased life expectancy of youth in developing countries will enhance economic activity in developing countries. Prosperity characteristics such as income, nutrition, education, access to medical services support reduction of mortality of young people. Currently globally an economic slowdown is apparent. So what are the health risks for youth in the context of globally sharing prosperity?
    Keywords: technology, therapy, health risks, life expectancy, and prosperity
    Date: 2012–09
  17. By: Mark E. McGovern (Harvard Center for Population and Development Studies and University College Dublin)
    Abstract: The prevalence of low birth weight is an important aspect of public health which has been linked to increased risk of infant death, increased cost of care, and a range of later life outcomes. Using data from a new Irish cohort study, I document the relationship between birth weight and socioeconomic status. The association of maternal education with birth weight does not appear to be due to the timing of birth or complications during pregnancy, even controlling for a wide range of background characteristics. However, results do suggest intergenerational persistence in the transmission of poor early life conditions. Birth weight predicts a number of outcomes at age 9, including test scores, hospital stays and health. An advantage of the data is that I am able to control for a number of typically unmeasured variables. I determine whether parental investments (as measured by the quality of interaction with the child, parenting style, or school quality) mediate the association between birth weight and later indicators. For test scores, there is evidence of non-linearity, and boys are more adversely aected than girls. I also consider whether there are heterogeneous effects by ability using quantile regression. These results are consistent with a literature which finds that there is a causal relationship between early life conditions and later outcomes.
    Keywords: Early life conditions, birth weight, health inequalities, test scores
    JEL: I14 I18 J13
    Date: 2012–10–09

This nep-hea issue is ©2012 by Yong Yin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.