nep-ias New Economics Papers
on Insurance Economics
Issue of 2011‒01‒16
five papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Business Management

  1. The impact of medical and nursing home expenses and social insurance By Karen A. Kopecky; Tatyana Koreshkova
  2. Heterogeneity and risk sharing in village economies By Pierre-Andre Chiappori; Krislert Samphantharak; Sam Schulhofer-Wohl
  4. Insurance Mandates and Mammography By Marianne P. Bitler; Christopher S. Carpenter
  5. Labor force participation by the elderly in Mexico By Edwin van Gameren

  1. By: Karen A. Kopecky; Tatyana Koreshkova
    Abstract: We consider a life-cycle model with idiosyncratic risk in labor earnings, out-of-pocket medical and nursing home expenses, and survival. Partial insurance is available through welfare, Medicaid, and social security. Calibrating the model to the United States, we find that 12 percent of aggregate savings is accumulated to finance and self-insure against old-age health expenses given the absence of complete public health care for the elderly and that nursing home expenses play an important role in the savings of the wealthy and on aggregate. Moreover, we find that the aggregate and distributional effects of public health care provision are highly dependent on the availability of other programs making up the social insurance system.
    Date: 2010
  2. By: Pierre-Andre Chiappori; Krislert Samphantharak; Sam Schulhofer-Wohl
    Abstract: We measure heterogeneity in risk aversion among households in Thai villages using a full risk-sharing model and complement the results with a measure based on optimal portfolio choice. Among households with relatives living in the same village, full insurance cannot be rejected, suggesting that relatives provide something close to a complete-markets consumption allocation. There is substantial heterogeneity in risk preferences estimated from the full-insurance model, positively correlated in most villages with portfolio-choice estimates. The heterogeneity matters for policy: Although the average household would benefit from eliminating village-level risk, less-risk-averse households who are paid to absorb that risk would be worse off.
    Date: 2011
  3. By: Usman OWOLABI A (Department of Management Science, Ladoke Akintola University of Technology, Ogbomoso, Nigeria); AKINLO A. E (Department of Economics, Obafemi Awolowo University, Ile-Ife, Nigeria.)
    Abstract: Recapitalization process that has recently become an imperative process in the Nigerian Financial industry has implications for the survival of insurance sector, especially on their service delivery efficiency. This study therefore seeks to investigate the problem of inefficiency in the Nigerian Insurance market from the perspective of their cost structures. The study takes advantage of secondary data of financial reports of thirty randomly selected insurance firms which span over a period of ten years and applied transcendental logarithm model to evaluate their performance from the cost structures strategy. The results indicate that only large scale firms enjoy cost saving advantages. Twenty percent firms sampled belong to this category. The result suggests that premium income would contribute to insurance firm’s performance, only when a sound investment decisions are made.
    Keywords: Transcedental Logarithm, Cost Structures, Insurance firms and Efficiency
    JEL: G22
    Date: 2010–08
  4. By: Marianne P. Bitler; Christopher S. Carpenter
    Abstract: Recently adopted federal health reform requires insurers to cover mammograms without cost-sharing. We examine similar state insurance mandates that vary substantially in the timing of adoption and in specifying the ages of women eligible for different mammography benefits. In triple differences models we find that mandates requiring coverage of annual mammograms significantly increased past year mammography screenings by about 8 percent, representing over 800,000 additional women screened from 1987-2000. Mandates that explicitly prohibit deductibles are especially effective at increasing screenings among high school dropouts, suggesting that federal health reform is likely to further increase use of screening mammography.
    JEL: I1 I18
    Date: 2011–01
  5. By: Edwin van Gameren (El Colegio de México)
    Abstract: A brief review of the aging of the Mexican population, the high labor force participation of elderly, and the lack of retirement pensions, is followed by a causal empirical analysis using a panel data set (Mexican Health and Aging Study, MHAS) of Mexicans aged 50 and more. We find that the labor force participation of elderly men is affected by their economic situation; in particular the availability of a retirement pension (after contributions to a pension plan earlier in their life) reduces participation. A better health raises male participation rates, while the health effect is absent for women. The opposite effect, from labor force participation on health status, is negligible for both genders. Access to health services, which is obtained if the partner or a child is working, reduces participation rates. Additional analysis indicates that the same variables influence the choice for a job in the formal or the informal sector, and whether a job is held in addition to a pension. The results suggest that a redesign of the social security including retirement pensions and health care services has implications for the individuals’ participation decisions, and therefore for future contributions to the insurance and pension plans.
    Keywords: labor force participation, pension, health, insurance
    JEL: J14 J22 C35 D13
    Date: 2010–12

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