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on Insurance Economics |
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Issue of 2011‒06‒18
seven papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Business Management |
| By: | Alan B. Krueger (Princeton University); Ilyana Kuziemko (Princeton University) |
| Abstract: | Most existing work on the price elasticity of demand for health insurance focuses on employees' decisions to enroll in employer-provided plans. Yet any attempt to achieve universal coverage must focus on the uninsured, the vast majority of whom are not offered employer-sponsored insurance. In the summer of 2008, we conducted a survey experiment to assess the willingness to pay for a health plan among a large sample of uninsured Americans. The experiment yields price elasticities substantially greater than those found in most previous studies. We use these results to estimate coverage expansion under the Affordable Care Act, with and without an individual mandate. We estimate that 39 million uninsured individuals would gain coverage and find limited evidence of adverse selection. |
| Keywords: | health insurance, universal coverage, Affordable Care Act, price elasticity of demand |
| JEL: | D19 H75 I18 J32 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:pri:cepsud:1306&r=ias |
| By: | Alan B. Krueger (Princeton University); Ilyana Kuziemko (Princeton University and NBER) |
| Abstract: | Most existing work on the price elasticity of demand for health insurance focuses on employees' decisions to enroll in employer-provided plans. Yet any attempt to achieve universal coverage must focus on the uninsured, the vast majority of whom are not offered employer-sponsored insurance. In the summer of 2008, we conducted a survey experiment to assess the willingness to pay for a health plan among a large sample of uninsured Americans. The experiment yields price elasticities substantially greater than those found in most previous studies. We use these results to estimate coverage expansion under the Aordable Care Act, with and without an individual mandate. We estimate that 39 million uninsured individuals would gain coverage and find limited evidence of adverse selection. |
| Keywords: | health insurance, universal coverage, Affordable Care Act, price elasticity of demand |
| JEL: | D19 H75 I18 J32 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:pri:indrel:1310&r=ias |
| By: | Ngalawa, Harold; Tchana Tchana, Fulbert; Viegi, Nicola |
| Abstract: | This paper aims at empirically investigating the role of moral hazard in the e¢ ctivity of deposit insurance in achieving banking stability. If the negative e¤ect of deposit insurance on banking stability is through moral hazard, then deposit insurance will be associated with banking insolvency and credit crunch more than with bank runs. To test this hypothesis, we compute measures of these two types of banking instability. We nd that deposit insurance per se has no signi cant e¤ect either on bank insolvency and credit crunch or on bank runs. However, when the deposit insurance is coupled with an increase in credit to private sector, it has a positive and signi cant e¤ect on bank insolvency and credit crunch but not on bank runs. |
| Keywords: | Banking Crises; Deposit Insurance; Moral hazard |
| JEL: | E44 G21 |
| Date: | 2011–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31329&r=ias |
| By: | Hairault, Jean-Olivier; Langot, François; Ménard, Sébastien; Sopraseuth, Thepthida |
| Abstract: | This paper shows that optimal unemployment insurance contracts are age-dependent. Older workers have only a few years left on the labor market prior to retirement. This short horizon implies a more decreasing replacement ratio. However, there is a sufficiently short distance to retirement for which flat unemployment benefits can be the optimal contract. It is the result of the inability to reconcile both incentives and insurance for the soon-to-be-retired unemployed workers. We show that the unemployment benefit agency could take advantage of the retirement period to tax pensions in order to optimize the trade-off between insurance and incentives at the end of working life. |
| Keywords: | Unemployment insurance; Retirement; Recursive contracts; Moral Hazard |
| JEL: | C61 J64 J65 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpm:docweb:1107&r=ias |
| By: | Spenkch, Jörg L. |
| Abstract: | Not only does economic theory predict high-risk individuals to be more likely to purchase insurance, but insurance coverage is also thought to crowd out precautionary activities. In spite of stark theoretical predictions, there is conflicting empirical evidence on adverse selection, and evidence on ex ante moral hazard is very scarce. Using data from the Seguro Popular Experiment in Mexico, this paper documents patterns of adverse selection into health insurance as well as the existence of non-negligible ex ante moral hazard. More specifically, the findings indicate that (i) agents in poor self-assessed health prior to the intervention have, all else equal, a higher propensity to take up insurance; and (ii) insurance coverage reduces the demand for self-protection in the form of preventive care. Curiously, however, individuals do not sort based on objective measures of their health. |
| Keywords: | health insurance; adverse selection; moral hazard |
| JEL: | I11 D82 I10 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:31443&r=ias |
| By: | Tobias Alexander Jopp |
| Abstract: | By the mid-19th century, following the Prussian mining reform, German miners‘ combined mutual health and pension funds took on the characteristics of social insurance and underwent a concentration process driven by mergers, liquidations, and unequal internal growth. This paper investigates the determinants of mergers by absorption among Prussian funds combined with quantitative evidence from a regression model, provides new insights into the first social-insurance merger wave in Germany. While most contemporary sources convey the impression that funds were merged to stabilize the entire insurance scheme by sorting out actuarially unviable and financially distressed funds, statistical evidence suggests that funds were absorbed over time primarily because they offered advantages to the absorbing fund and, hence, were quite attractive targets. |
| Keywords: | Competing risk; financial distress; insurance; Knappschaft; liquidation; merger; mining |
| JEL: | C41 G22 G23 I31 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0246&r=ias |
| By: | Tobias A. Jopp |
| Abstract: | This paper contributes to the literature on the weakness of modern pay-as-you-go social security systems in financing pensions by taking a business and economic historical perspective on the issue. It focuses on Prussian Knappschaften (plural of Knappschaft), which provided miners with compulsory invalidity and implicit old-age insurance, and studies the period from 1854 to 1913. Knappschaften used the pay-as-you-go mechanism, and, in the long-term, came under financial pressure by the rising number of pensioners. The question to be answered is whether Knappschaften were able to off er cohorts of miners entering the system at diff erent times the same implicit rates of return. Did Knappschaften provide an intergenerationally sustainable policy, or did adjustments of contributions and other parameters decrease the dividend for insured miners over time? |
| Keywords: | Insurance; implicit rates of return; Knappschaft; mining; pay-as-you-go; pensions; Prussia; welfare state |
| JEL: | N33 N83 H53 H55 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0238&r=ias |