nep-ias New Economics Papers
on Insurance Economics
Issue of 2009‒03‒28
three papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Bussiness Management

  1. Do German Welfare-to-Work Programmes Reduce Welfare and Increase Work? By Huber, Martin; Lechner, Michael; Walter, Thomas; Wunsch, Conny
  2. How a Mandatory Activation Program Reduces Unemployment Durations; the Effects of Distance By Krogh Graversen, Brian; van Ours, Jan C
  3. Responding to financial pressures. The effect of managed care on hospitals' provision of charity care By Mas, Nuria

  1. By: Huber, Martin; Lechner, Michael; Walter, Thomas; Wunsch, Conny
    Abstract: Many Western economies have reformed their welfare systems with the aim of activating welfare recipients by increasing welfare-to-work programmes and job search enforcement. We evaluate the three most important German welfare-to-work programmes implemented after a major reform in January 2005 ("Hartz IV"). Our analysis is based on a unique combination of large scale survey and administrative data that is unusually rich with respect to individual, household, agency level, and regional information. We use this richness to allow for a selection-on-observables approach when doing the econometric evaluation. We find that short-term training programmes on average increase their participants' employment perspectives and that all programmes induce further programme participation. We also show that there is considerable effect heterogeneity across different subgroups of participants that could be exploited to improve the allocation of welfare recipients to the specific programmes and thus increase overall programme effectiveness.
    Keywords: panel data; targeting; programme evaluation; propensity score matching,; Welfare-to-work policies
    JEL: J68
    Date: 2009–03
  2. By: Krogh Graversen, Brian; van Ours, Jan C
    Abstract: In an experimental setting some Danish unemployed workers were assigned to an activation program while others were not. Unemployed who were assigned to the activation program found a job more quickly. We show that the activation effect increases with the distance between the place of residence of the unemployed worker and the place where the activation took place. We also find that the quality of the post-unemployment jobs was not affected by the activation program. Both findings confirm that activation programs mainly work because they are compulsory and unemployed don't like them.
    Keywords: Activation program; Experiment; Unemployment duration; Unemployment insurance
    JEL: C41 H55 J64 J65
    Date: 2009–03
  3. By: Mas, Nuria (IESE Business School)
    Abstract: The United States relies on charitable medical care to serve the uninsured, most of which is offered by hospitals that act as providers of last resort and that constitute the safety net. Traditionally, these hospitals have been able to finance their provision of unfunded care through a complex system of cross-subsidies. The objective of this paper is to analyze the effects that financial pressures have on the provision of charity care by hospitals. To do so we look at the effect of price pressures and at the cost-controlling mechanisms imposed by managed care. Our hypothesis is that price competition and other forms of financial pressures undermine hospitals' ability to cross-subsidize and so challenges their survival. Our results show that managed care has a disproportionately negative effect on the closure of safety net hospitals. Moreover, amongst those that remain open, in areas where managed care penetration increases the most, safety net hospitals react by closing the health services most commonly used by the uninsured (emergency rooms, obstetrics, and alcohol and drug treatments).
    Keywords: medical; uninsured; hospitals; safety;
    Date: 2009–02–09

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