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on Insurance Economics |
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Issue of 2008‒05‒17
four papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Bussiness Management |
| By: | Boris Augurzky; Harald Tauchmann |
| Abstract: | This paper uses individual level data to analyze the effect of changes in the compulsory benefit package of the German statutory health insurance scheme on the demand for private supplementary insurance. In particular, we aim at measuring the effect of excluding dentures from the benefit package in 1997 as well as the effect of re-including them in 1999.Adifference-in-differences estimator is used. Individuals born prior to 1979 serve as control group because only the young were affected by the reform.Our results do not exhibit any significant effects on the demand for supplementary health insurance. Thus, the hypothesis that clients do make informed choices about their health insurances’ coverage is not supported. |
| Keywords: | Supplementary private health insurance, dentures, difference- indifferences |
| JEL: | I12 P23 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0046&r=ias |
| By: | Fransesca Valentini |
| Abstract: | ABSTRACT : Unemployment insurance and job protection regulations provide assistance to those who face unemployment. Unemployment insurance seems more desirable, since it does not harm flexibility in the labour markets, but it entails a moral hazard risk. Making the unemployment insurance voluntary and private would create more problems related mostly to the nature of the unemployment risk and to asymmetric information. Instead, it would sound more desirable to improve the design of unemployment insurance in a way that it would protect the individuals without harming flexibility and incentives for job seekers and job owners. Against this background, Unemployment Insurance Savings Accounts (UISA) have been proposed by a number of scholars. This paper provides a literature review of the theoretical properties of the UISA and analyses the current experience of Chile. It then investigates the similarities and differences between this UISA system and the severance payment savings account reforms recently implemented in Austria and Colombia. In light of both the theoretical and the practical perspectives, the UISA seem a valuable option, since they provide insurance without excessively harming the incentives of the individuals, offering security without impeding the flexibility in the labour markets. |
| Keywords: | unemployment insurance, savings accounts, UISA, Chile, severance pay reform, funded scheme |
| JEL: | H53 H55 I38 J65 J68 |
| Date: | 2008–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1136&r=ias |
| By: | Jonathan Chiu; Miguel Molico |
| Abstract: | This paper studies the welfare costs and the redistributive effects of inflation in the presence of idiosyncratic liquidity risk, in a micro-founded search-theoretical monetary model. We calibrate the model to match the empirical aggregate money demand and the distribution of money holdings across households, and study the effects of inflation under the implied degree of market incompleteness. We show that in the presence of imperfect insurance the estimated long-run welfare costs of inflation are on average 40% smaller compared to a complete markets, representative agent economy, and that inflation induces important redistributive effects across households. For example, the welfare gains of reducing inflation from 10% to 0% is 0.59% of income. Furthermore, we estimate that the long-run welfare gains of reducing the typical current inflation target of 2 to 1 percent to be 0.06% of income. |
| Keywords: | Inflation: costs and benefits; Monetary policy framework |
| JEL: | E40 E50 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:08-13&r=ias |
| By: | John Geanakoplos; Stephen P. Zeldes |
| Abstract: | The heated debate about how to reform Social Security has come to a standstill because the view of most Democrats (that Social Security must be a defined benefits plan similar in spirit to the current system) seems irreconcilable with the proposals supported by many Republicans (to create a defined contribution system of personal accounts holding marketed assets). We describe a system of "progressive personal accounts" that preserves the core goals of both parties, and that is self-balancing on an ongoing basis. Progressive personal accounts have two critical features: (1) accruals into the personal accounts would be exclusively in a new kind of derivative security (which we call a PAAW for Personal Annuitized Average Wage security) that pays its owner one inflation-corrected dollar during every year of life after his statutory retirement date, multiplied by the economy wide average wage at the retirement date and (2) households would buy their new PAAWs each year with their social security contributions, augmented or reduced by a government match that would add to contributions from households with low lifetime incomes by taking from households with high lifetime incomes. PAAWS define benefits and achieve risk sharing across generations, as Democrats would like, yet can be held in personal accounts with market valuations, as Republicans propose. |
| JEL: | D91 E6 H55 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13979&r=ias |