|
on Insurance Economics |
|
Issue of 2010‒06‒11
five papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Bussiness Management |
| By: | Marshall Auerback; L. Randall Wray |
| Abstract: | The United States has the most expensive health care system in the world, yet its system produces inferior outcomes relative to those in other countries. This brief examines the health care reform debate, and argues that the basic structure of the health care system is unlikely to change, because "reform" measures actually promote the status quo. The authors believe that the fundamental problem facing the U.S. health care system is the unhealthy lifestyle of many Americans. They prefer to see a reduced role for private insurers and an increased role for government funding, along with greater public discussion of environmental and lifestyle factors. A Medicare buy-in ("public option") for people under 65 would provide more cost control (by competing with private insurance), help to solve the problem of treatment denial based on preexisting conditions, expand the risk pool of patients, and enhance the global competitiveness of U.S. corporations--thus bringing the U.S. health care system closer to the "ideal" low-cost, universal (single-payer) insurance plan. |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levppb:ppb_110&r=ias |
| By: | Miquel Faig; Min Zhang |
| Abstract: | If entitlement to Unemployment Insurance (UI) benefits must be earned with employment, generous UI is an additional benefit to an employment relationship, so it promotes job creation. If individuals are risk neutral, UI is fairly priced, and the UI system prevents moral-hazard, the generosity of UI has no effect on unemployment. As with Ricardian Equivalence, this result should be useful to pinpoint the effects of UI to violation of its premises. In itself, the endogenous entitlement of UI benefits does not resolve if the Mortensen-Pissarides model is able to generate realistic cycles. However, it brings some insights into this debate: The widespread concern in the design of UI systems to minimize moral-hazard unemployment only makes sense if workers have sufficiently high values of leisure (80 percent of labor productivity in our baseline calculation for the United States). Also, the fact that the generosity of UI has potentially a small effect on unemployment reconciles a high response of unemployment to changes in labor productivity with a small response to changes in UI benefits. |
| Keywords: | Search, Matching, UI Eligibility, Business Cycles, Labor Markets |
| JEL: | E24 E32 J64 |
| Date: | 2010–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-404&r=ias |
| By: | Jörg Bibow |
| Abstract: | This paper investigates the spread of what started as a crisis at the core of the global financial system to emerging economies. While emerging economies had exhibited some resilience through the early stages of the financial turmoil that began in the summer of 2007, they have been hit hard since mid-2008. Their deteriorating fortunes are only partly attributable to the collapse in world trade and sharp drop in commodity prices. Things were made worse by emerging markets' exposure to the turmoil in global finance itself. As "innocent bystanders," even countries that had taken out "self-insurance" proved vulnerable to the global "sudden stop" in capital flows. We critique loanable funds theoretical interpretations of global imbalances and offer an alternative explanation that emphasizes the special status of the U.S. dollar. Instead of taking out even more self-insurance, developing countries should pursue capital account management to enlarge their policy space and reduce external vulnerabilities. |
| Keywords: | Financial Crisis; Capital Flows; Self-insurance; Capital Controls; Bretton Woods II Hypothesis; Global Saving Glut Hypothesis |
| JEL: | E12 E43 E44 F02 F10 F32 F33 F42 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_591&r=ias |
| By: | Rocha, Roberto; Rudolph, Heinz P. |
| Abstract: | The rapid growth of the market for retirement products in Chile has its origins in the pension reform that was implemented in 1981. But the successful development of an active annuity market also reflects many other factors. This paper summarizes and updates an earlier longer study on the development of the Chilean annuity market. The update focuses on the numerous changes that were introduced in 2008. The most striking aspect of the Chilean experience is the very high rate of annuitization. This has been linked to the restrictions that have been applied to lump-sum withdrawals, the offer of inflation-protected annuities, and the robust prudential regulation of providers. But the level of annuitization has also been supported by the annuitization incentives provided to early retirees and the influence of brokers and sales agents. The recent regulatory changes have weakened the impact of the last two factors, while strengthening the demand for annuities at normal retirement. |
| Keywords: | Debt Markets,Pensions&Retirement Systems,Insurance&Risk Mitigation,Emerging Markets,Non Bank Financial Institutions |
| Date: | 2010–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5325&r=ias |
| By: | Sagiri Kitao; Aysegül Sahin; Joseph Song |
| Abstract: | We analyze the effects of various labor market policies on job creation, job destruction, and employment. The framework of Mortensen and Pissarides (2003) is used to model the dynamic interaction between firms and workers and to simulate their responses to alternative policies. The equilibrium model is calibrated to capture labor market conditions at the end of 2009, including the unemployment, inflow, and outflow rates by workers of different educational attainment. We consider the equilibrium effects of a hiring subsidy, a payroll tax reduction, and an employment subsidy. While calibrating parameters that characterize these policies, we try to mimic the policies in the Hiring Incentives to Restore Employment (HIRE) Act of 2010. We find that a hiring subsidy and a payroll tax deduction, as in the HIRE Act, can stimulate job creation in the short term, but can cause a higher equilibrium unemployment rate in the long term. Employment subsidies succeed in lowering the unemployment rate permanently, but the policy entails high fiscal costs. |
| Keywords: | Employment ; Unemployment ; Unemployment insurance ; Labor market ; Subsidies ; Equilibrium (Economics) |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:451&r=ias |