nep-ias New Economics Papers
on Insurance Economics
Issue of 2006‒02‒05
seven papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Bussiness Management

  1. The Health Care Safety Net and Crowd-Out of Private Health Insurance By Anthony T. Lo Sasso; Bruce D. Meyer
  2. Health Insurance and the Wage Gap By Helen Levy
  3. The U.S. Health Care System and Labor Markets By Brigitte Madrian
  4. Pension Insurance By Zvi Bodie
  5. Firms, industries, and unemployment insurance: an analysis using employer-employee data from Canada By Corak, Miles; Chen, Wen-Hao
  6. Entreprises, industries et assurance chômage : une analyse des données sur les employeurs et les employés recueillies au Canada By Corak, Miles; Chen, Wen-Hao

  1. By: Anthony T. Lo Sasso; Bruce D. Meyer
    Abstract: There is an extensive literature on the extent to which public health insurance coverage through Medicaid induces less private health insurance coverage. However, little is known about the effect of other components of the health care safety net in crowding out private coverage. We examine the effect of Medicaid and uncompensated care provided by clinics and hospitals on insurance coverage. We construct a long panel of metropolitan area and state-level data on hospital uncompensated care and free and reduced price care offered by Federally Qualified Health Centers. We match this information to individual level data on coverage from the Current Population Survey for two distinct groups: children aged 14 and under and single, childless adults aged 18 to 64. Our results provide mixed evidence on the extent of crowd-out. Hospital uncompensated care does not appear to crowd-out health insurance coverage and health center uncompensated care appears to crowd-out private coverage for adults and, in some specifications, children.
    JEL: I10 I11 I18
    Date: 2006–01
  2. By: Helen Levy
    Abstract: Estimates of labor market inequality usually focus only on wages, even though fringes account for almost one-third of total compensation. Using data from the Current Population Survey, I analyze coverage by own-employer health insurance coverage among full-time workers for women versus men, blacks versus whites and Hispanics versus whites. I find significant gaps in coverage for each of these groups. About two-thirds of the gap for blacks or Hispanics is explained by differences in observable characteristics (primarily education and occupation). The gap for women is not explained by controlling for observables. Looking over the 20 year period from 1980 to 2000, I find that the adjusted gap in own-employer coverage for women has been relatively flat over this period and is consistently much smaller than the male/female wage gap (about half as large), so that measuring inequality in wages plus health insurance would result in a smaller estimate of male/female compensation inequality than measuring wages alone. The same is generally true for blacks although their health insurance gap is much closer in magnitude to their wage gap. For Hispanics, the health insurance gap is nearly identical to the wage gap and both are increasing over time.
    JEL: I1 J3
    Date: 2006–01
  3. By: Brigitte Madrian
    Abstract: This paper provides a broad and general overview of the relationship between the U.S. health care system and the labor market. The paper first describes some of the salient features of and facts about the system of health insurance coverage in the U.S., particularly the role of employers. It then summarizes the empirical evidence on how health insurance impacts labor market outcomes such as wages, labor supply (including retirement, female labor supply, part-time vs. full-time work, and formal vs. informal sector work), labor demand (including hours worked and the composition of employment across full-time, part-time and temporary workers), and job turnover. It then discusses the implications of having a fragmented system of health insurance delivery--in which employers play a central role--on the health care system and health care outcomes.
    JEL: I10 J3 J6
    Date: 2006–01
  4. By: Zvi Bodie
    Abstract: Around the world today there are striking differences in pension systems. The roles played by families, employers, trade unions, financial intermediaries, community organizations, affiliation groups, and governmental agencies vary tremendously. Yet despite these differences, in almost every country the government is ultimately the pension insurer of last resort, either explicitly or implicitly. If designed well and managed well, a system of government pension insurance can enhance the wellbeing of the individuals served by it and even contribute towards the resilience of the financial system at large. But if designed or managed poorly, it can undermine economic security at both the micro and macro level. This paper explores the principles for the successful management of pension insurance and draws some lessons from the mistakes made by the U.S. government in managing its Pension Benefit Guarantee Corporation.
    Keywords: pension funds; insurance.
    JEL: G23 H55
    Date: 2005–12
  5. By: Corak, Miles; Chen, Wen-Hao
    Abstract: The exploration of newly available administrative data in a number of countries has led to a growing realization that a careful study of the interaction between employer and employee characteristics is needed to fully understand labour market outcomes. The objective of this paper is to develop this theme by examining the design of social policy and its interaction with the labour market. The focus is on the Canadian unemployment insurance (UI) program. This analysis uses administrative data on the universe of employees, firms, and UI recipients in Canada over an 11 year period to examine the operation of UI from the perspective of the firm, paying particular attention to longitudinal issues associated with the pattern and causes of cross-subsidies. The findings show that persistent transfers through UI are present at both industry and firm levels. These cross-subsidies are concentrated among a small fraction of firms. An analysis using firm fixed effect indicates that almost 60 percent of explained variation in persistent cross-subsidies can be attributed to firm effects. Calculations of overall efficiency loss are very sensitive to the degree to which firm level information is used. A full appreciation of how social programs like UI interact with the labour market requires recognition of the characteristics and human resource practices of firms, and might be more fruitfully explored by implicit contract models of unemployment.
    Date: 2005–06–30
  6. By: Corak, Miles; Chen, Wen-Hao
    Abstract: L'analyse de données administratives devenues disponibles récemment dans un certain nombre de pays a mené à la conclusion qu'une étude minutieuse de l'interaction entre les caractéristiques de l'employeur et celles des employés est nécessaire pour bien interpréter les résultats observés sur le marché du travail. L'objectif du présent document est de développer ce thème grâce à l'examen de la conception de la politique sociale et de son interaction avec le marché du travail, en mettant l'accent sur le régime canadien d'assurance chômage (a. c.). Des données administratives couvrant l'univers des employés, des entreprises et des prestataires de l'assurance chômage au Canada sur une période de 11 ans sont utilisées afin d'examiner le fonctionnement de l'assurance chômage du point de vue de l'entreprise, en accordant une attention particulière aux questions longitudinales que soulèvent le profil et les causes de l'interfinancement. L'étude montre que des transferts persistants se produisent par la voie de l'assurance chômage au niveau tant de l'industrie que de l'entreprise. Cet interfinancement est le propre d'une petite fraction d'entreprises. Une analyse tenant compte des effets fixes d'entreprise montre que presque 60 % de la variation expliquée de l'interfinancement persistant est due à ce genre d'effets. Le calcul de la perte globale d'efficacité est très sensible au niveau de détail des données sur les entreprises. Pour saisir pleinement la façon dont les programmes sociaux, comme celui de l'assurance chômage, interagissent avec le marché du travail, il faut tenir compte des caractéristiques des entreprises et de leurs pratiques en matière de ressources humaines, et l'étude de cet
    Date: 2005–06–30
  7. By: Claudio Campanale (Universidad de Alicante)
    Abstract: In this paper I present an explanation to the fact that in the data wealth is substantially more concentrated than income. Starting from the observation that the composition of households' portfolios changes towards a larger share of high-yield assets as the level of net worth increases, I first use data on historical asset returns and portfolio composition by wealth level to construct an empirical return function. I then augment the standard neoclassical growth model with idiosyncratic labor income risk and missing insurance markets to allow for returns to savings to be increasing in the level of accumulated assets. The quantitative properties of the model are examined and show that an empirically plausible difference between the return faced by poor and wealthy agents is able to generate a substantial increase in wealth inequality compared to the basic model, enough to match the Gini index of the U.S. Distribution of wealth.
    Keywords: Wealth inequality, self-insurance, portfolio composition, increasing returns
    Date: 2005–05

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