nep-hea New Economics Papers
on Health Economics
Issue of 2019‒03‒18
fourteen papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. Disability and Distress: The Effect of Disability Programs on Financial Outcomes By Manasi Deshpande; Tal Gross; Yalun Su
  2. The Disability Option: Labor Market Dynamics with Macroeconomic and Health Risks By Amanda Michaud; David Wiczer
  3. Information Source and Cigarettes: Experimental Evidence on the Messenger Effect By Johanna Catherine Maclean; John Buckell; Joachim Marti
  4. Selection and moral hazard effects in healthcare By Minke Remmerswaal; Jan Boone; Rudy Douven
  5. Pay What Your Dad Paid: Commitment and Price Rigidity in the Market for Life Insurance By Radoslaw Paluszynski; Pei Cheng
  6. The direct and spillover effects of a mental health program for disruptive students By Chaisemartin, Clement de; Navarrete, Nicolas
  7. Insurance design in the presence of safety nets By Teh, Tse-Ling
  8. School Bus Emissions, Student Health, and Academic Performance By Wes Austin; Garth Heutel; Daniel Kreisman
  9. Life Expectancy and Parental Education in Germany By Mathias Huebener
  10. Reference pricing systems on the pharmaceutical market By Unsorg, Maximiliane
  11. Risky Working Conditions: An Immigrant Trap or an Income Effect? By Eva Moreno-Galbis
  12. Information and Behavioral Responses with More than One Agent: The Case of Domestic Violence Awareness Campaigns By Jorge M. Agüero
  13. An Operationalizing Theoretical Framework for the Analysis of Universal Health Coverage Reforms: First Test on an Archetype Developing Economy By Sameera Awawda; Mohammad Abu-Zaineh
  14. Maternal Health, Children Education and Women Empowerment: Quasi-Experimental Evidence from India By Chatterjee, Somdeep; Poddary, Prashant

  1. By: Manasi Deshpande; Tal Gross; Yalun Su
    Abstract: We provide the first evidence on the relationship between disability programs and markers of financial distress: bankruptcy, foreclosure, eviction, and home sale. Rates of these adverse financial events peak around the time of disability application and subsequently fall for both allowed and denied applicants. To estimate the causal effect of disability programs on these outcomes, we use variation induced by an age-based eligibility rule and find that disability allowance substantially reduces the likelihood of adverse financial events. Within three years of the decision, the likelihood of bankruptcy falls by 0.81 percentage point (30 percent), and the likelihood of foreclosure and home sale among homeowners falls by 1.7 percentage points (30 percent) and 2.5 percentage points (20 percent), respectively. We find suggestive evidence of reductions in eviction rates. Conversely, the likelihood of home purchases increases by 0.86 percentage point (20 percent) within three years. We present evidence that these changes reflect true reductions in financial distress. In our model of optimal disability benefits, considering these extreme events increases optimal disability benefits and potentially shortens waiting times.
    JEL: D14 H50 I30
    Date: 2019–03
  2. By: Amanda Michaud (University of Western Ontario); David Wiczer (Stony Brook University)
    Abstract: We evaluate the contribution of changing macroeconomic conditions and demographics to the increase in Social Security Disability Insurance (SSDI) over recent decades. Within our quantitative framework, multiple sectors differentially expose workers to health and economic risks, both of which affect individuals’ decisions to apply for SSDI. Over the transition, falling wages at the bottom of the distribution increased awards by 27% in the 1980s and 90s and aging demographics rose in importance thereafter. The model also implies two-thirds of the decline in working-age male employment from 1985 to 2013, three-fourths of which eventually goes on SSDI.
    Date: 2018
  3. By: Johanna Catherine Maclean; John Buckell; Joachim Marti
    Abstract: We examine the importance of information source (the ‘messenger’) on consumer choice in the context of cigarettes, electronic and tobacco. We proxy choice with intentions to use cigarettes and risk perceptions. We experimentally vary the messenger across three information sources: government, physicians, and private companies. We compare effects relative to a no source control in a sample of adult smokers. Neoclassical theory predicts that the information source, or the messenger, should not influence choices. Behavioral economics suggests that the messenger can have important implications for how consumers process information and, in turn, make decisions. Our findings provide evidence in line with behavioral economics: the messenger influences intention to use e-cigarettes, and risk perceptions about e-cigarettes and tobacco cigarettes. Private companies appear to be particularly important messengers and are potentially the economic agents most likely to shape the future adult demand for cigarettes.
    JEL: D9 I1 I12
    Date: 2019–03
  4. By: Minke Remmerswaal (CPB Netherlands Bureau for Economic Policy Analysis); Jan Boone (CPB Netherlands Bureau for Economic Policy Analysis); Rudy Douven (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: In the Netherlands, average healthcare expenditures of persons with a voluntary deductible are twice as high as average healthcare expenditures of persons without a voluntary deductible. When assessing the effects of voluntary cost-sharing in healthcare on healthcare expenditures, it is important to disentangle moral hazard from selection: are healthcare expenditures low because people pay (a bigger share of) their healthcare expenditures out-of-pocket? Or are people with higher cost-sharing levels healthier? In this study, we separate selection from moral hazard for the combined mandatory and voluntary deductible in the Netherlands. We use proprietary claims data from Dutch health insurers and exploit with a panel regression discontinuity design that we can observe healthcare expenditures before and after the deductibles kick in for 18 year olds. Our study shows that selection, not moral hazard, is the main effect explaining the difference in healthcare expenditures between persons with and without a voluntary deductible. Furthermore, we find that 18 year olds who never chose a voluntary deductible reduce their healthcare spending by 26 euros (on average) in response to a 100 euro increase in the (mandatory) deductible. However, for 18 year olds who chose a voluntary deductible (on top of the mandatory) we find that this choice does not result in a further reduction in healthcare spending.
    JEL: I11 I13 H51
    Date: 2019–03
  5. By: Radoslaw Paluszynski (University of Houston); Pei Cheng (UNSW Business School)
    Abstract: Life insurance premiums display significant rigidity in the data, on average adjusting once every 3 years by more than 10%. This contrasts with the underlying marginal cost which exhibits considerable volatility due to the movements in interest and mortality rates. We build and calibrate a model where policyholders are held-up by long-term insurance contracts, resulting in a time inconsistency problem for the firms. The optimal contract takes the form of a simple cutoff rule: premiums are rigid for cost realizations smaller than the threshold, while adjustments must be large and are only possible when cost realizations exceed it.
    Keywords: Life insurance, Time inconsistency, Hold-up problem, Commitment, Flexibility
    JEL: G22 L11 L14
    Date: 2019–02
  6. By: Chaisemartin, Clement de (UC Santa Barbara); Navarrete, Nicolas (Paris School of Economics)
    Abstract: A large literature finds that cognitive behavioral therapy programs for disruptive students can reduce their disruptiveness and improve their academic outcomes. However, the literature has mostly considered demonstration programs implemented with significant researcher involvement, and has not studied the spillover effects on ineligible students. In this paper, we use a randomized controlled trial to estimate the direct and spillover effects of one such program, implemented as a nationwide policy in Chile. The program has no effect on eligible students’ disruptiveness and academic outcomes. It increases the disruptiveness of ineligible students. Finally, it increases the segregation between eligible and ineligible students
    Keywords: JEL Classification:
    Date: 2019
  7. By: Teh, Tse-Ling
    Abstract: Safety net assistance and insurance exist to manage risk and improve welfare. This shared goal may lead to crowding out. In a new approach, this paper analyzes the interaction of assistance with two dimensions of insurance design: level of coverage and types of risks covered. In a society of risk averse vulnerable individuals and risk neutral assistance providers, Pareto improvements in welfare are achieved through incom- pleteness in the types of risks covered. The results imply that safety nets promote demand for and the emergence of incomplete insurance. These results have a wide application to insurance markets where safety nets are available, including health care, disaster aid and social welfare.
    JEL: F3 G3
    Date: 2017–05–01
  8. By: Wes Austin; Garth Heutel; Daniel Kreisman
    Abstract: Diesel emissions from school buses expose children to high levels of air pollution; retrofitting bus engines can substantially reduce this exposure. Using variation from 2,656 retrofits across Georgia, we estimate effects of emissions reductions on district-level health and academic achievement. We demonstrate positive effects on respiratory health, measured by a statewide test of aerobic capacity. Placebo tests on body mass index show no impact. We also find that retrofitting districts see significant test score gains in English and smaller gains in math. Results suggest that engine retrofits can have meaningful and cost-effective impacts on health and cognitive functioning.
    JEL: I18 I20 Q53
    Date: 2019–03
  9. By: Mathias Huebener
    Abstract: This study analyses the relationship between life expectancy and parental education. Based on data from the German Socio-Economic Panel Study and survival analysis models, we show that maternal education is related to children’s life expectancy – even after controlling for children’sown level of education. This applies equally to daughters and sons as well as to children’s further life expectancies examined at age 35 to age 65. This pattern is more pronounced for younger cohorts. In most cases, the education of the father is not significantly related to children’s life expectancy. Neither the vocational training nor the occupational position of the parents in childhood, which both correlate with household income, can explain the connection. The health behaviour of the children and the health accumulated over the life course appear as important channels. This study extends the previous literature that focused mostly on the relationship between individuals’ own education and their life expectancy. It implies that the link between education and life expectancy is substantially stronger and that returns to education are higher if the intergenerational component is considered.
    Keywords: Health inequality, returns to education, mortality, parental background, human capital, survival analysis
    JEL: I12 I14
    Date: 2019
  10. By: Unsorg, Maximiliane
    Abstract: Constantly rising expenditures for pharmaceuticals require government intervention in firms' pricing decisions. To this end, reference pricing systems are a frequently employed regulatory mechanism. This paper considers a duopoly market with vertically differentiated firms under different competition types. Starting from the existing literature it can be confirmed that the introduction of a reference price leads to lower equilibrium prices and induces fiercer competition between firms. Further, it can be shown that reference pricing promotes generic usage and leads to an increased market coverage. Hence, an improved provision of medical supply is achieved due to the lower prices and the stimulated demand for drugs. The paper demonstrates that even under the increased demand consumer and insurance expenditures are reduced. The model isolates the mechanisms of reference pricing and shows the effects on the consumer decisions. Lastly, consumer surplus increases when implementing the regulation.
    Keywords: reference pricing,pharmaceutical market,copayment,price cap,price competition,expenditures,consumer surplus
    JEL: I11 I18 L51
    Date: 2018
  11. By: Eva Moreno-Galbis (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE & Institut Universitaire de France)
    Abstract: Immigrants’ income has been proved to converge to the average native income level with years of residence in the host country. This income assimilation effect is surprisingly not associated with a health improvement. Some emerging studies point towards the role of working conditions as a driver of the counterfactual relation between immigrants’ health and income. Using French data, we first show that, consistently with Viscusi (1978), working conditions are a normal good. An increase in 10% in non-earned income is associated with a decrease by 0.85% in professional injuries and by more than 3.2% in disabilities induced by professional illnesses. Second, we find that while immigrants bear in average worse working conditions than natives, this divergence results from an income divergence effect since for an equivalent non-earned income level there are no significant differences in working conditions between natives and immigrants. Income assimilation of immigrants is associated with an assimilation in working conditions. We conclude then that bad working conditions cannot be blamed for the degradation of immigrants’ health with years of residence in the host country.
    Keywords: immigrants, working conditions, income
    JEL: A14 J15 J61 J81
    Date: 2019–02
  12. By: Jorge M. Agüero (University of Connecticut)
    Abstract: Behavioral interventions often provide information to help improve outcomes and many focus on settings with only one decision maker. We explore the case where two agents have opposed goals and show that information campaigns worsen outcomes. Using exogenous variation in the intensity of nationwide awareness campaigns to reduce violence against women in Peru, we show that these efforts led to more violence including more killings of women. An increase in the controlling behaviors of husbands during those months is identified as a possible mechanism. These findings question the efficacy of such campaigns on the short-term reduction of violence.
    Keywords: domestic violence, health information, backlash
    JEL: J12 J16 D13
    Date: 2019–03
  13. By: Sameera Awawda (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE); Mohammad Abu-Zaineh (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE)
    Abstract: This paper presents an operationalizing theoretical framework to analyze the potential effects of universal health coverage (UHC) using dynamic stochastic general equilibrium (DSGE) model. The DSGE encapsulates a set of heterogeneous households that optimize their intertemporal utility of consumption, health capital, and leisure. The model is calibrated to capture the salient features of an archetype developing economy. The model is, then, used to simulate alternative UHC-financing policies. The theoretical framework we propose can be easily adapted to assess the implementation of UHC in a particular developing country setting. When applied to a hypothetical country, results show that the implementation of UHC can indeed improve access to healthcare for the population while offering households financial protection against future uncertainty. However, the degree of financial risk protection appears to vary across heterogeneous households and UHC-financing policies, depending on the associated benefits and the additional burden borne by each group.
    Keywords: universal health coverage, financial risk protection, dynamic stochastic general equilibrium model, developing countries
    Date: 2019–02
  14. By: Chatterjee, Somdeep; Poddary, Prashant
    Abstract: The empirical evidence on the inter-generational effects of maternal health interventions is inconclusive, particularly the impact on cognitive ability of children. In this paper, we study one such popular policy from India, viz, the Janani Suraksha Yojana (JSY) which is a agship health and safe motherhood program. We exploit plausible exogenous variation in exposure to the program generated by the institutional features of the implementation, in a cross-sectional difference-in-difference framework to find evidence of reduction in academic test scores of children whose parents remained unexposed to the policy intervention. We also find that such children spend less time on homework during the week, were less likely to attend and enjoy school. We also find negative effects on women empowerment measures for the unexposed women. The results suggest that the JSY led to increase in women empowerment and improved cognitive outcomes for children.
    Keywords: maternal health,women empowerment,children education
    JEL: D10 I18 I20 I38
    Date: 2019

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