nep-ias New Economics Papers
on Insurance Economics
Issue of 2005‒04‒24
six papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Bussiness Management

  1. Is a Friend in Need a Friend Indeed? Inclusion and Exclusion in Mutual Insurance Networks in Southern Ghana By Markus Goldstein; Alain de Janvry; Elisabeth Sadoulet
  2. Do Benefit Hikes Damage Job Finding? Evidence from Swedish Unemployment Insurance Reforms By Bennmarker, Helge; Carling, Kenneth; Holmlund, Bertil
  3. Partial Identification of Treatment Effects in the Presence of Unobserved Treatments: The Case of Universal Health Insurance By Kreider, Brent; Hill, Steven C.
  4. Influence of the Premium Subsidy on Farmers’ Crop Insurance Coverage Decisions By Babcock, Bruce A.; Hart, Chad E.
  5. Employment-Contingent Health Insurance, Illness and Labor Supply of Women: Evidence from Married Women with Breast Cancer By Cathy J. Bradley; David Neumark; Zhehui Luo; Heather L. Bednarek
  6. Betting on Death and Capital Markets in Retirement: A Shortfall Risk Analysis of Life Annuities By Ivica Dus; Raimond Maurer; Olivia S. Mitchell

  1. By: Markus Goldstein (none); Alain de Janvry (University of California, Berkeley); Elisabeth Sadoulet (University of California, Berkeley)
    Keywords: household models, insurance, risk, social aspects, villages,
    Date: 2003–06–01
  2. By: Bennmarker, Helge (Institute for Labour Market Policy Evaluation); Carling, Kenneth (Institute for Labour Market Policy Evaluation); Holmlund, Bertil (Department of Economics)
    Abstract: In 2001 and 2002, Sweden introduced several unemployment insurance reforms. A major innovation in the first reform was the introduction of a two-tiered benefit structure for some unemployed individuals. This system involved supplementary compensation during the first 20 weeks of unemployment. The 2002 reform retained the two-tiered benefit structure but involved also substantial benefit hikes for spells exceeding 20 weeks. This paper examines how these reforms affected transitions from unemployment to employment. We take advantage of the fact that the reforms had quasi-experimental features where the “treatments” differed considerably among unemployed individuals. We find that the reforms had strikingly different effects on job finding among men and women. The two reforms in conjunction are estimated to have increased the expected duration of unemployment among men but to have decreased the duration of unemployment among women. The overall effect on the duration of unemployment is not statistically different from zero. However, the reforms reduced job finding among males who remained unemployed for more than 20 weeks.
    Keywords: Unemployment duration; Unemployment benefits
    JEL: J64 J65
    Date: 2005–03–29
  3. By: Kreider, Brent; Hill, Steven C.
    Abstract: We extend the nonparametric literature on partially identified probability distributions and use the framework to make inferences about relationships between health care utilization and insurance status in an environment of uncertainty about the accuracy of self-reported insurance data. Allowing for endogenous reporting error, we use information from the 1996 Medical Expenditure Panel Survey (MEPS) to study what can be learned about (a) the gap between the insured and uninsured in the use of health services and (b) the potential impact of universal insurance coverage on the use of services. We exploit outside information from insurance cards and follow-back interviews with employers, insurance companies, and medical providers to construct validation data for a nonrandom portion of the sample. We formally assess the identifying power of a variety of nonparametric assumptions that shrink identification regions compared with those provided in previous studies, such as Molinari’s (2002) treatment effect bounds under missing treatments. Under our strongest nonparametric assumptions, universal health insurance would increase the proportion of the population using health care in a month by no more than 2.5 percentage points for adults (an 11% increase) and by no more than 0.8 percentage points for children (a 4.8% increase).
    JEL: C1 I1
    Date: 2005–04–17
  4. By: Babcock, Bruce A.; Hart, Chad E.
    Abstract: The Agricultural Risk Protection Act greatly increased the expected marginal net benefit of farmers buying high-coverage crop insurance policies by coupling premium subsidies to coverage level. This policy change, combined with cross-sectional variations in expected marginal net benefits of high-coverage policies, is used to estimate the role that premium subsidies play in farmers’ crop insurance decisions. We use county data for corn, soybeans, and wheat to estimate regression equations that are then used to obtain insight into two policy scenarios. We first estimate that eventual adoption of actuarially fair incremental premiums, combined with current coupled subsidies, would increase farmers’ purchase of high-coverage policies by almost 400 percent from 1998 levels across the three crops and two plans of insurance included in the analysis. We then estimate that a return to decoupled subsidies would decrease farmers’ high-coverage purchase decisions by an average of 36 percent. Keywords: Agricultural Risk Protection Act, crop insurance, premium subsidies.
    Date: 2005–04–18
  5. By: Cathy J. Bradley (Virginia Commonwealth University); David Neumark (Public Policy Institute of California and IZA Bonn); Zhehui Luo (Michigan State University); Heather L. Bednarek (St. Louis University)
    Abstract: We examine the effects of employment-contingent health insurance on married women’s labor supply following a health shock. First, we develop a theoretical model that examines the effects of employment-contingent health insurance on the labor supply response to a health shock, to clarify under what conditions employment-contingent health insurance is likely to dampen the labor supply response. Second, we empirically evaluate this relationship using primary data. The results from our analysis find that – as the model suggests is likely – health shocks decrease labor supply to a greater extent among women insured by their spouse’s policy than among women with health insurance through their own employer. Employmentcontingent health insurance appears to create incentives to remain working and to work at a greater intensity when faced with a serious illness.
    Keywords: health insurance, health shock, cancer, labor supply
    JEL: I12 J22
    Date: 2005–04
  6. By: Ivica Dus; Raimond Maurer; Olivia S. Mitchell
    Abstract: Retirees must draw down their accumulated assets in an orderly fashion, so as not to exhaust their funds too soon. We compare alternative phased withdrawal strategies to a life annuity benchmark using German data; one particular phased withdrawal rule seems attractive, as it offers relatively low expected shortfall risk, good expected payouts for the retiree during his life, and some bequest potential; results are similar for the US case. Delayed annuitization may also appeal, as it offers higher expected benefits with lower expected shortfalls. Requiring unisex mortality tables in annuity pric-ing raises women's risks under a phased withdrawal program.
    JEL: G22 G23 J26 J32
    Date: 2005–04

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