nep-hea New Economics Papers
on Health Economics
Issue of 2019‒12‒23
eleven papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. Disability Insurance: Error Rates and Gender Differences By Hamish Low; Luigi Pistaferri
  2. Origins of the Opioid Crisis and Its Enduring Impacts By Abby E. Alpert; William N. Evans; Ethan M.J. Lieber; David Powell
  3. The Impact of Expanding Public Health Insurance on Safety Net Program Participation: Evidence from the ACA Medicaid Expansion By Lucie Schmidt; Lara Shore-Sheppard; Tara Watson
  4. Who’s declining the “free lunch”? New evidence from the uptake of public child dental benefits By Nguyen, Ha Trong; Le, Huong Thu; Connelly, Luke B.
  5. Developmental origins of health inequality By Gabriella Conti; Giacomo Mason; Stavros Poupakis
  6. Dynamic analysis of demographic change and human capital accumulation in an R&D-based growth model By Kohei Okada
  7. Optimal insurance with adverse selection and comonotonic background risk By David Alary; Franck Bien
  8. Alternative Demography-based Projection Approaches for Public Health and Long-term Care Expenditure By Lassila, Jukka; Valkonen, Tarmo
  9. Major health shocks and decisions about labour force participation amongst Mexican couples By Vega, Alejandro
  10. Avoidable environmental disasters and infant health: Evidence from a mining dam collapse in Brazil By Bladimir Carrillo; Daniel Da Mata; Lucas Emanuel; Daniel Lopes; Breno Sampaio
  11. Social Capital and Health: A Meta-Analysis By Xindong Xue; W. Robert Reed; Andrea K. Menclova

  1. By: Hamish Low; Luigi Pistaferri
    Abstract: We show the extent of errors made in the award of disability insurance using matched survey-administrative data. False rejections (Type I errors) are widespread, and there are large gender differences in these type I error rates. Women with a severe, work-limiting, permanent impairment are 20 percentage points more likely to be rejected than men, controlling for the type of health condition, occupation, and a host of demographic characteristics. We investigate whether these gender differences in Type I errors are due to women being in better health than men, to women having lower pain thresholds, or to women applying more readily for disability insurance. None of these explanations are consistent with the data. We use evidence from disability vignettes to suggest that there are different acceptance thresholds for men and women. The differences by gender arise because women are more likely to be assessed as being able to fi nd other work than observationally equivalent men. Despite this, after rejection, women with a self-reported work limitation do not return to work, compared to rejected women without a work limitation.
    JEL: H55 J16 J71
    Date: 2019–11
  2. By: Abby E. Alpert; William N. Evans; Ethan M.J. Lieber; David Powell
    Abstract: Overdose deaths involving opioids have increased dramatically since the mid-1990s, leading to the worst drug overdose epidemic in U.S. history, but there is limited empirical evidence on the initial causes. In this paper, we examine the role of the 1996 introduction and marketing of OxyContin as a potential leading cause of the opioid crisis. We leverage cross-state variation in exposure to OxyContin’s introduction due to a state policy that substantially limited OxyContin’s early entry and marketing in select states. Recently-unsealed court documents involving Purdue Pharma show that state-based triplicate prescription programs posed a major obstacle to sales of OxyContin and suggest that less marketing was targeted to states with these programs. We find that OxyContin distribution was about 50% lower in “triplicate states” in the years after the launch. While triplicate states had higher rates of overdose deaths prior to 1996, this relationship flipped shortly after the launch and triplicate states saw substantially slower growth in overdose deaths, continuing even twenty years after OxyContin's introduction. Our results show that the introduction and marketing of OxyContin explain a substantial share of overdose deaths over the last two decades.
    JEL: I12 I18
    Date: 2019–11
  3. By: Lucie Schmidt; Lara Shore-Sheppard; Tara Watson
    Abstract: The expansion of public insurance eligibility that occurred with the Affordable Care Act (ACA) Medicaid expansions may have spillover effects to other public assistance programs. We explore the impact of the ACA on two large safety net programs: the Earned Income Tax Credit (EITC) and the Supplemental Nutrition Assistance Program (SNAP). We use a county border-pair research design, examining county-level administrative measures of EITC and SNAP participation in contiguous county pairs that cross state lines where the county on one side of the border experienced the Medicaid expansion and the county on the other side did not. This approach allows us to focus narrowly on differences arising from the ACA Medicaid expansion choice, implicitly controlling for local economic trends that could affect safety net participation. Our results suggest that the Medicaid expansion increased participation in SNAP, and possibly in the EITC, in counties that expanded relative to nearby counties that did not expand. We corroborate and extend these results using individual level data from the American Community Survey (ACS). Our results show that access to one safety net program may increase take-up of others.
    JEL: I13 I38
    Date: 2019–11
  4. By: Nguyen, Ha Trong; Le, Huong Thu; Connelly, Luke B.
    Abstract: Recent economic literature has advanced the notion that cognitive biases and behavioural barriers may be important influencers of uptake decisions in respect of public programs that are designed to help disadvantaged people. This paper provides the first evidence on the determinants of uptake of two recent public dental benefit programs for Australian children and adolescents from disadvantaged families. Using longitudinal data from a nationally representative survey linked to administrative data with accurate information on eligibility and uptake, we find that only a third of all eligible families actually claim their benefits. These actual uptake rates are about half of the targeted access rates that were announced for them. We provide new and robust evidence consistent with the idea that cognitive biases and behavioural factors are barriers to uptake. For instance, mothers with worse mental health or riskier lifestyles are much less likely to claim the available benefits for their children. These barriers to uptake are particularly large in magnitude: together they reduce the uptake rate by up to 10 percentage points (or 36%). We also find some indicative evidence that a lack of information is a barrier to uptake. The results are robust to a wide range of sensitivity checks, including controlling for possible endogenous sample selection.
    Keywords: Government Programs,Impact Evaluation,Dental Health,Provision and Effects of Welfare Programs,Australia,Uptake,Take-up
    JEL: D91 H51 I12 I18 I38
    Date: 2019
  5. By: Gabriella Conti (Institute for Fiscal Studies and University College London); Giacomo Mason (Institute for Fiscal Studies); Stavros Poupakis (Institute for Fiscal Studies and University of Essex)
    Abstract: Building on early animal studies, 20th-century researchers increasingly explored the fact that early events – ranging from conception to childhood – affect a child’s health trajectory in the long-term. By the 21st century, a wide body of research had emerged, incorporating the original ‘Fetal Origins Hypothesis’ into the ‘Developmental Origins of Health and Disease’. Evidence from OECD countries suggests that health inequalities are strongly correlated with many dimensions of socio-economic status, such as educational attainment; and that they tend to increase with age and carry stark intergenerational implications. Different economic theories have been developed to rationalize this evidence, with an overarching comprehensive framework still lacking. Existing models widely rely on human capital theory, which has given rise to separate dynamic models of adult and child health capital, within a production function framework. A large body of empirical evidence has also found support for the developmental origins of inequalities in health. On the one hand, studies exploiting quasi-random exposure to adverse events have shown long-term physical and mental health impacts of exposure to early shocks, including pandemics or maternal illness, famine, malnutrition, stress, vitamin deficiencies, maltreatment, pollution and economic recessions. On the other hand, studies from the 20th century have shown that early interventions of various content and delivery format improve life course health. Further, given that the most socioeconomically disadvantaged groups show the greatest gains, such measures can potentially reduce health inequalities. However, studies of long-term impacts, as well as the mechanisms via which shocks or policies affect health, and the dynamic interaction amongst them, are still lacking. Mapping the complexities of those early event dynamics is an important avenue for future research.
    Date: 2019–06–26
  6. By: Kohei Okada (Graduate School of Economics, Osaka University,)
    Abstract: Employing an overlapping-generations model of R&D-based growth with endogenous fertil- ity, mortality, and education choice, we examine how demographic changes and human capital accumulation influence R&D activity. We show that multiple steady states can exist in this economy. One steady state has a high level of human capital and the other has a low level. In the steady state with high (low) level of human capital, there is a high (low) level of R&D activity, a low (high) fertility rate, and a high (low) old-age survival rate. In addition, we show that the government can steer an economy away from a poverty trap trajectory by investing in public health. We also show that an improvement in the government's public health policy has an inverted U-shaped effect on the growth rate at the steady state.
    Keywords: Demographic change, Human capital accumulation, R&D
    JEL: I25 J10 O10 O30
    Date: 2019–12
  7. By: David Alary (LERNA - Laboratoire d'Economie des ressources Naturelles - INRA - Institut National de la Recherche Agronomique); Franck Bien (LEDa - Laboratoire d'Economie de Dauphine - CNRS - Centre National de la Recherche Scientifique - IRD - Institut de Recherche pour le Développement - Université Paris-Dauphine)
    Abstract: In this note, we consider an adverse selection problem involving an insurance market à la Rothschild-Stiglitz. We assume that part of the loss is uninsurable as in the case with health care or environmental risk. We characterize sufficient conditions such that adverse selection by itself does not distort competitive insurance contracts. A sufficiently large uninsurable loss provides an incentive to high-risk policy holders not to mimic low-risk policy holders without distorting the optimal coverage.
    Keywords: Adverse Selection,Background risk,Optimal Contract
    Date: 2019–12–02
  8. By: Lassila, Jukka; Valkonen, Tarmo
    Abstract: Abstract Ageing populations pose a major challenge for long-term sustainability of public finances. The respond has been a wave of pension reforms that has lowered markedly the projected pension expenditure in EU countries. The increase in the second major expenditure item, health and long-term care costs, has become the most important element of fiscal sustainability gaps. We compare different demography-based approaches generally used to evaluate the costs. The interaction of different projection approaches and demography is illustrated by using realizations of a stochastic population projection as inputs in a numerical expenditure model. Our example country is Finland. Our results show that considering the effects of proximity to death on the expenditure generates markedly slower expected expenditure growth for the health and long-term care costs than using age-specific costs or the method developed and used by the European Commission and the Finnish Ministry of Finance. In addition, the sensitivity of the expenditure projections to demographic risks is lower. The differences in the outcomes of the different approaches are largest in long-term care costs, which are in any case growing faster in Finland than the health care expenditure because on population ageing.
    Keywords: Population ageing, Demographic uncertainty, Health care costs, Long-term care costs
    JEL: H55 H68 J11
    Date: 2019–12–20
  9. By: Vega, Alejandro (Department of Economics, Umeå University)
    Abstract: The purpose of this study is to analyze the labour force participation response to major health shocks, such as new cancer diagnoses, heart attacks and strokes, in middle- aged to elderly Mexican couples. The data originate from the Mexican Health and Aging Study (MHAS), and provides information on how couples coordinate their labour market activities in response to major health shocks. I find that female labour force participation is negatively affected by a major health shock to her spouse. In contrast, there is not a significant effect of a female negative health shock on her spouse’s labour force participation. I find the same result when the labour force participation is split between part-time work and full-time work.
    Keywords: health shock; labour force participation; household model; labour supply; elderly couples
    JEL: I10 J01
    Date: 2019–12–09
  10. By: Bladimir Carrillo; Daniel Da Mata; Lucas Emanuel; Daniel Lopes; Breno Sampaio
    Abstract: We study the health consequences of one of the largest environmental disasters of the world mining industry, which largely stemmed from regulatory failure. Exploiting the timing and location of the Mariana mine tailings dam collapse in Brazil, we show that in utero exposure to the tragedy significantly reduced birth weight and increased infant mortality. The adverse effects were stronger for infants born to less educated and single mothers. These findings indicate that poorly enforced environmental regulation may have long-term welfare impacts on local communities.
    Keywords: Birth weight; Preventable disasters; Mining; In utero exposure
    JEL: I18 I15 J13 Q50
    Date: 2019–12–05
  11. By: Xindong Xue; W. Robert Reed (University of Canterbury); Andrea K. Menclova (University of Canterbury)
    Abstract: The relationship between social capital and health has received extensive attention in fields such as public health, medicine, epidemiology, gerontology and other health-related disciplines. In contrast, the economics literature on this subject is relatively small. To address this research gap, we investigate the cross-disciplinary empirical literature using meta-analysis. We analyze 12,778 estimates from 470 studies. Our analysis finds that social capital is significantly related to a variety of positive health outcomes. However, the effect sizes are consistently very small. This finding is robust across different types of social capital (e.g., cognitive, structural, bonding, bridging, linking), and for many different measures of health outcomes (e.g., mortality, disease/illnesses, depression). The small effects that we estimate cast doubt on recent initiatives to promote health through social capital such as those by the WHO, the OECD, and US Healthy People 2020.
    Keywords: Social capital, Health, Meta-analysis, Mental health, Physical health, Self-reported health
    JEL: B49 C49 I10 I31
    Date: 2019–12–01

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