nep-ias New Economics Papers
on Insurance Economics
Issue of 2012‒12‒06
eight papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Business Management

  1. Implicit redistribution in the Chilean Social Insurance System By Eduardo Fajnzylber
  2. Women.s Labour Supply and Household Insurance in Africa By Bhalotra, Sonia; Umana-Aponte, Marcela
  3. Agricultural Decisions after Relaxing Credit and Risk Constraints By Dean Karlan; Christopher Udry; Isaac Osei-Akoto; Robert Darko Osei
  4. Technical Appendix to "Quantitative Analysis of Health Insurance Reform: Separating Regulation from Redistribution" By Svetlana Pashchenko; Ponpoje Porapakkarm
  5. Mutual health insurance and its contribution to improving child health in Rwanda By Binagwaho, Agnes; Hartwig, Renate; Ingeri, Denyse; Makaka, Andrew
  6. Performance of the life insurance industry under pressure: efficiency, competition and consolidation By Jacob Bikker
  7. Do Low-Wage Workers React Less to Longer Unemployment Benefits? Quasi-Experimental Evidence By Centeno, Mario; Novo, Alvaro A.
  8. Long-term participation tax rates By Bartels, Charlotte

  1. By: Eduardo Fajnzylber (Escuela de Gobierno, Universidad Adolfo Ibáñez)
    Date: 2012–03
  2. By: Bhalotra, Sonia; Umana-Aponte, Marcela
    Keywords: insurance, women.s labour supply, added worker effect, business cycles, Africa
    Date: 2012
  3. By: Dean Karlan (Economic Growth Center, Yale University); Christopher Udry (Economic Growth Center, Yale University); Isaac Osei-Akoto (University of Ghana, Legon); Robert Darko Osei (University of Ghana, Legon)
    Abstract: The investment decisions of small-scale farmers in developing countries are conditioned by their financial environment. Binding credit market constraints and incomplete insurance can reduce investment in activities with high expected profits. We conducted several experiments in northern Ghana in which farmers were randomly assigned to receive cash grants, grants of or opportunities to purchase rainfall index insurance, or a combination of the two. Demand for index insurance is strong, and insurance leads to significantly larger agricultural investment and riskier production choices in agriculture. The salient constraint to farmer investment is uninsured risk: when provided with insurance against the primary catastrophic risk they face, farmers are able to find resources to increase expenditure on their farms. Demand for insurance in subsequent years is strongly increasing in a farmer’s own receipt of insurance payouts, and with the receipt of payouts by others in the farmer’s social network. Both investment patterns and the demand for index insurance are consistent with the presence of important basis risk associated with the index insurance, and with imperfect trust that promised payouts will be delivered.
    Keywords: agriculture, insurance markets, credit markets, risk, underinvestment, misallocation
    JEL: C93 D24 D92 G22 O12 O13 O16 Q12 Q14
    Date: 2012–10
  4. By: Svetlana Pashchenko (Uppsala University); Ponpoje Porapakkarm (University of Macau)
    Abstract: Technical appendix for the Review of Economic Dynamics article
    Date: 2012
  5. By: Binagwaho, Agnes; Hartwig, Renate; Ingeri, Denyse; Makaka, Andrew
    Abstract: Rwanda is among the few countries in Sub-Saharan Africa and the developing approaching universal health insurance coverage. To date, over 90 per cent of the population are enrolled in the Mutuelles de Santé - a system that started off from a number of stand-alone community based health insurance schemes and gradually evolved into a unified social health insurance plan. The country has also made remarkable progress in ameliorating child health, particularly since 2005, which coincides with the year when the Mutuelles de Santé was standardised and raises the question to what extent the insurance scheme did contribute to the observed improvements. In order to address this issue we conduct a quantitative impact evaluation using nationally representative micro-data from the 2005 and 2010 Rwandan Demographic and Health Surveys (RDHSs) and also consider potential channels from which improvements could originate. Our results suggest the following: The Mutuelles de Santé improves access to preventative and curative health services. Insured households are more sensitive to health issues, in the sense that they are more inclined to use bed nets and ensure safe drinking water. Despite a weak effect on health outcomes overall, the insurance scheme seems to have contributed to improvements in stunting and mortality, at the critical ages (before the age of two). --
    Keywords: Health Insurance,Child Health,Mutuelles de Santé,Rwanda
    JEL: I11 I38 J13
    Date: 2012
  6. By: Jacob Bikker
    Abstract: A well-performing life insurance industry benefits consumers, producers and insurance firm stockholders alike. Unfavourable market conditions stress the need for life insurers to perform well in order to remain solvent. Using a unique supervisory data set, this paper investigates competition and efficiency in the Dutch life insurance market by estimating unused scale economies and measuring efficiency-market share dynamics during 1995-2010. Large unused scale economies exist for small and medium-sized life insurers, indicating that further consolidation would reduce costs. Over time average scale economies decrease but substantial differences between small and large insurers remain. A direct measure of competition confirms that competitive pressures are at a lower level than in other markets. We do not observe any impact of increased competition from banks, the so-called investment policy crisis or the credit crisis, apart from lower returns in 2008. Investigation of product submarkets reveals that competition is higher on the collective policy market, while the opposite is true for the unit-linked market, where the role of intermediary agents is largest.
    Keywords: Life insurance; competition; efficiency; Performance-Conduct-Structure model; Boone indicator; concentration; economies of scale
    JEL: G22 L1
    Date: 2012–11
  7. By: Centeno, Mario (Banco de Portugal); Novo, Alvaro A. (Banco de Portugal)
    Abstract: The fact that unemployed workers have different abilities to smooth consumption entails heterogeneous responses to extended unemployment benefits. Our empirical exercise explores a quasi-experimental setting generated by an increase in the benefits entitlement period. The results point towards a hump-shape response of unemployment duration over the one-year pre-unemployment wage distribution; individuals at the bottom and at the top of the wage distribution reacted less than those in the interquartile range. This behavior of job searchers is consistent with labor supply models with unemployment insurance and savings. It questions the optimality of very long entitlement periods to target the unemployment experiences of low-wage workers.
    Keywords: entitlement extension, unemployment duration, unemployment insurance, liquidity effect
    JEL: J65 J64 J22
    Date: 2012–11
  8. By: Bartels, Charlotte
    Abstract: Generous income support programs as provided by European welfare states have often been blamed to reduce work incentives for lower income classes and to increase durations of unemployment. Standard studies measure work incentives based on annual income concepts. This paper analyzes how work incentives inherent in the German tax-benefit system evolve when extending the time horizon to three years (long-term). Participation tax rates are computed for 3-year periods 1995-1997 and 2005-2007 to reveal potential effects of the labor market reforms between 2003 and 2005. Results show that long-term work incentives increased even more than short-term work incentives. Particularly for middle-income individuals, this is largely explained by the abolition of earnings-related unemployment assistance. --
    Keywords: welfare,work incentives,unemployment,unemployment insurance
    JEL: H31 J65
    Date: 2012

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