nep-ias New Economics Papers
on Insurance Economics
Issue of 2009‒01‒24
five papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Bussiness Management

  1. The Effect of Receiving Supplementary UI Benefits on Unemployment Duration By Kyyrä, Tomi; Parrotta, Pierpaolo; Rosholm, Michael
  2. Approaches to Estimating the Health State Dependence of the Utility Function By Finkelstein, Amy; Luttmer, Erzo F.P.; Notowidigdo, Matthew J.
  3. Health and Utilization Effects of Increased Access to Publicly Provided Health Care: Evidence from the U.S. Department of Veterans Affairs By Melissa Boyle
  4. Performance of business groups: Evidence from post-crisis Russia By Shumilov, Andrei
  5. Public Policies and Women's Employment after Childbearing By Han, Wen-Jui; Ruhm, Christopher J.; Waldfogel, Jane; Washbrook, Elizabeth

  1. By: Kyyrä, Tomi (VATT, Helsinki); Parrotta, Pierpaolo (Aarhus School of Business); Rosholm, Michael (Aarhus School of Business)
    Abstract: We consider the consequences of working part-time on supplementary unemployment insurance benefits in the Danish labour market. Following the "timing-of-events" approach we estimate causal effects of subsidized part-time work on the hazard rate out of unemployment insurance benefit receipt. We find evidence of a negative lock-in effect and a positive post-treatment effect, both of which vary across individuals. The resulting net effect on the expected unemployment duration is positive for some groups (e.g. married women) and negative for others (e.g. young workers).
    Keywords: unemployment benefits, part-time work, lock-in effect, treatment effect, duration analysis
    JEL: C41 J65
    Date: 2009–01
  2. By: Finkelstein, Amy (MIT); Luttmer, Erzo F.P. (Harvard University); Notowidigdo, Matthew J. (MIT)
    Abstract: If the marginal utility of consumption depends on health status, this will affect the economic analysis of a number of central problems in public finance, including the optimal structure of health insurance and optimal life cycle savings. In this paper, we describe the promises and challenges of various approaches to estimating the effect of health on the marginal utility of consumption. Our basic conclusion is that while none of these approaches is a panacea, many offer the potential to shed important insights on the nature of health state dependence.
    Keywords: state dependence, health, insurance, marginal utility
    JEL: D12 I1
    Date: 2009–01
  3. By: Melissa Boyle (Department of Economics, College of the Holy Cross)
    Abstract: During the mid-1990s, the U.S. Department of Veterans Affairs overhauled its health care system in an attempt to increase quality and efficiency. The restructuring involved the adoption of a capitated payment system and treatment methods based on the managed care model. This reorganization was accompanied by a major expansion in the population eligible to receive VA care. Using the National Health Interview Survey and VA medical claims data, this study analyzes both the efficiency of providing public health care in a managed care setting and the effectiveness of expanding coverage to healthier and wealthier populations. I estimate that between 35 and 70 percent of new take-up of VA care was the result of individuals dropping private health insurance. While utilization of services increased, estimates of the impact on aggregate veteran health imply that the policy change did not result in net health improvements. Regions providing more care to healthier, newly-eligible veterans had bigger reductions in hospital care and larger increases in outpatient services for previously-eligible veterans. This shift away from specialty care may help to explain the aggregate health declines.
    Keywords: Medicare, elderly, veteran, VA healthcare
    JEL: J2 I18
    Date: 2009–01
  4. By: Shumilov, Andrei (BOFIT)
    Abstract: Transition economies like Russia lack properly functioning financial markets and institutions, which results in severe agency and information problems. Business groups in such markets have the potential to offer benefits to member firms, but they also may destroy value. Using a unique database on membership in Russian business groups, we analyze the relationship between group affiliation and firm performance on the basis of a large panel of manufacturing firms for the period 1999-2002. We find that group membership has a positive effect on productive efficiency, but gains from improved productivity in group affiliates do not adequately translate into higher profitability. This is consistent with the expropriation hypothesis, according to which controlling owners of groups extract private benefits by siphoning profits from their members. Among the different group categories delineated by type of controlling owner, the extent of profit dissipation is especially large in groups controlled by private domestic owners, who face a greater risk of possible future expropriation of property. Finally, we examine two potential sources of benefits of membership in business groups: mutual insurance among affiliated firms and preferential treatment from the state via subsidies and tolerated tax arrears. We find that, during the period studied, groups neither provided mutual insurance nor did they receive larger support from the state than unaffiliated firms. Together with findings from the previous literature indicating that, prior to the 1998 financial crisis, group firms benefited from more efficient allocation of capital within groups than in the rest of the economy but not after the crisis, our results suggest that the advantages of group membership recede as the economic and institutional environment gradually improves.
    Keywords: business groups; firm performance; transition economy; Russia
    JEL: G30 L20
    Date: 2009–01–13
  5. By: Han, Wen-Jui (Columbia University); Ruhm, Christopher J. (University of North Carolina, Greensboro); Waldfogel, Jane (Columbia University); Washbrook, Elizabeth (University of Bristol)
    Abstract: This paper examines how the public policy environment in the United States affects work by new mothers following childbirth. We examine four types of policies that vary across states and affect the budget constraint in different ways. The policy environment has important effects, particularly for less advantaged mothers. There is a potential conflict between policies aiming to increase maternal employment and those maximizing the choices available to families with young children. However, this tradeoff is not absolute since some choice-increasing policies (generous child care subsidies and state parental leave laws) foster both choice and higher levels of employment.
    Keywords: public policies, maternal employment, childbearing
    JEL: J13 J18 J22
    Date: 2009–01

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