nep-ias New Economics Papers
on Insurance Economics
Issue of 2008‒04‒04
four papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Bussiness Management

  1. Work Disability, Health, and Incentive Effects By Börsch-Supan, Axel
  2. The Political Economy of the Disability Insurance. Theory and Evidence of Gubernatorial Learning from Social Security Administration Monitoring By Radha Iyengar; Giovanni Mastrobuoni
  3. The Value of Statistical Life and Cost-Benefit Evaluations of Landmine Clearance in Cambodia By Michael Cameron; John Gibson; Kent Helmers; Steven Lim; John Tressler; Kien Vaddanak
  4. When Does Improving Health Raise GDP? By Quamrul Ashraf; Ashley Lester; David Weil

  1. By: Börsch-Supan, Axel (Sonderforschungsbereich 504)
    Abstract: Disability insurance – the insurance against the loss of the ability to work – is a substantial part of social security expenditures in many countries. The enrolment rates in disability insurance vary strik-ingly across European countries and the US. This paper investigates the extent of, and the causes for, this variation, using data from SHARE, ELSA and HRS. We show that even after controlling for differences in the demographic structure and health status these differences remain. In turn, indicators of disability insurance generosity explain 75% of the cross-national variation. We conclude that country-specific disability insurance rules are a prime can-didate to explain the observed cross-country variation in disability insurance enrolment.
    Date: 2007–05–08
  2. By: Radha Iyengar; Giovanni Mastrobuoni
    Abstract: The dramatic rise in the disability insurance (DI) roles in the last 20 years has been the subject of much controversy in both popular and academic circles. While, the relationship between DI and labor force participation has been the subject of a growing literature, the mechanism of this transition from employment to DI remains unclear. We hypothesize that one mechanism is the state-level adminis- tration of the program which creates a classic principal-agent problem. This paper analyzes the impact of continuing conflict of interests for Disability Determination Services agencies—between Social Security Administration standards and state gu- bernatorial political interests—interacted with the increased demand for disability insurance as an alternative for low-skilled works during the period of 1982 to 2000. We find evidence that multi-term governors allow a greater fraction of applicants than do first term governors. We then develop a model that illustrates how these differences can be due to the type of monitoring conducted by the Social Security Administration. We provide additional evidence supporting this hypothesis in the form of sub-group analysis by economic and political constraints. Overall, we find evidence that the monitoring system is counter-productive and encourages over-use of the disability insurance program to serve political ends.
    Keywords: Disability insurance, political economy, monitoring, gubernatorial, po- litical factors, allowance rate.
    JEL: H53 H55 I12
    Date: 2008
  3. By: Michael Cameron (University of Waikato); John Gibson (University of Waikato); Kent Helmers (Independent Consultant); Steven Lim (University of Waikato); John Tressler (University of Waikato); Kien Vaddanak (Cambodian Red Cross)
    Abstract: Development agencies spend approximately US$400 million per year on landmine clearance. Yet many cost-benefit evaluations suggest that landmine clearance is socially wasteful because costs appear to far outweigh social benefits. This paper presents new estimates of the benefits of clearing landmines based on a contingent valuation survey in two provinces in rural Cambodia where we asked respondents questions that elicit their tradeoffs between money and the risk of death from landmine accidents. The estimated Value of a Statistical Life (VSL) is US$0.4 million. In contrast, most previous studies of landmine clearance use foregone income or average GDP per capita, which has a lifetime value of only US$2,000 in Cambodia. Humanitarian landmine clearance emerges as a more attractive rural development policy when appropriate estimates of the VSL are used.
    Keywords: benefit-cost analysis; contingent valuation; landmines; value of statistical life
    JEL: J17 O22
    Date: 2008–03–25
  4. By: Quamrul Ashraf; Ashley Lester; David Weil
    Abstract: We assess quantitatively the effect of exogenous health improvements on output, through demographic channels and changes in worker productivity. We consider both changes in general health, proxied by changes in life expectancy, and changes in the prevalence of two particular diseases: malaria and tuberculosis. In general, we find that the effects of health improvements on income are substantially lower than those that are often quoted by policy-makers, and may not emerge at all for a third of a century or more after the initial improvement in health.
    Date: 2008

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