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on Insurance Economics |
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Issue of 2013‒05‒22
nine papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Business Management |
| By: | Laun, Tobias (Uppsala Center for Fiscal Studies); Wallenius, Johanna (Department of Economics, Stockholm School of Economics) |
| Abstract: | In this paper we study the role of social insurance, namely old-age pensions, disability insurance and healthcare, in accounting for the differing labor supply patterns of older individuals across OECD countries. To this end, we develop a life cycle model of labor supply and health with heterogeneous agents. The key features of the framework are: (1) people choose when to stop working, and when/if to apply for disability and pension benefits, (2) the awarding of disability insurance benefits is imperfectly correlated with health, and (3) people can partially insure against health shocks by investing in health, the cost of which is dependent on health insurance coverage. We find that the incentives faced by older workers differ hugely across countries. In fact, based solely on differences in social insurance programs, the model predicts even more cross-country variation in the employment rates of people aged 55-64 than we observe in the data. |
| Keywords: | Life cycle; Retirement; Disability insurance; Health |
| JEL: | E24 J22 J26 |
| Date: | 2013–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:uufswp:2013_006&r=ias |
| By: | Andrei Barbos (Department of Economics, University of South Florida); Yi Deng (Department of Economics, University of South Florida) |
| Abstract: | We develop a framework where to examine the implications of the introduction of a non- profit "public option" in the U.S. health insurance market. In this model, a continuum of heterogeneous consumers, each facing unknown medical expenditures, and differing in their expectations of such expenditures, have to choose between two competing plans. One plan is offered by a profit-maximizing private insurer; the other by social-welfare-maximizing public option. The model is calibrated based on data of U.S. medical expenditures and estimation of a Bayesian hierarchical model. The Nash Equilibrium of the resulting market structure is solved using a numerical algorithm. In equilibrium, the distinct objectives of the two insurers induce adverse selection in consumer choice: the public option covers the less healthy consumers, yielding the more profitable segment of market to the private insurer. However, our empirical results suggest that both insurers will capture significant parts of the health insurance market. |
| Keywords: | Public Health Insurance, Bayesian Hierarchial Model |
| JEL: | I11 L10 L21 L32 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:usf:wpaper:0813&r=ias |
| By: | World Bank |
| Keywords: | Environment - Natural Disasters Insurance and Risk Mitigation Urban Development - Hazard Risk Management Conflict and Development - Disaster Management Banks and Banking Reform Finance and Financial Sector Development |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:12627&r=ias |
| By: | Baptiste Françon (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Michaël Zemmour (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne) |
| Abstract: | Degressivity of unemployment benefits is a major feature of social protection in most industrialised countries: the replacement rate (the ratio between the level of welfare benefits and the previous income) typically declines with the length of the unemployment spell. Moreover degressivity of unemployment benefits has significant distributive effects as the risk of long-term unemployment varies from one individual to another. This paper proposes a formal model of political support for unemployment insurance that takes into account the decrease in the level of benefits over time. A discount factor is introduced that diminishes the level of benefits for long-term unemployed. The main predictions of our model are the following: i) Unemployment insurance size negatively depends on both the average level and the heterogeneity of unemployment risk ii) The degressivity increases with the average level and the heterogeneity in the individual level of employability defined as the probability of finding a job when unemployed. These predictions are then tested using a dataset of 24 OECD countries. Empirical results are consistent with the model. |
| Keywords: | Long-term unemployment; political economy; replacement rate; risk heterogeneity; unemployment insurance; voting behaviour |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00821083&r=ias |
| By: | World Bank |
| Keywords: | Environment - Natural Disasters Urban Development - Hazard Risk Management Health, Nutrition and Population - Population Policies Conflict and Development - Disaster Management Environment - Adaptation to Climate Change Health Nutrition and Population |
| Date: | 2012–04 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:12628&r=ias |
| By: | Joseph J. Capuno; Stella A. Quimbo; Aleli D. Kraft; Carlos Antonio R. Tan, Jr. (School of Economics, University of the Philippines Diliman) |
| Abstract: | We investigate the effects of two accountability measures on the decisions of the local governments under decentralization. Using a panel of Philippine municipalities and cities in three election years, we find that term limits have negative but weak effects on the provision of health insurance coverage to poor families and on expenditures on local services. However, yardstick competition (i.e., more subsidized insurance coverage for the poor in neighboring local governments) induces them to cover more poor families, but also reduce other public expenditures. To respond to critiques of health decentralization, our results suggest that the objectives of local politicians can be aligned with those of the health sector. The key insight is the incumbent may extend health insurance coverage like a redistributive transfer to pursue reelection objectives. However, the resulting trade off between subsidized insurance coverage and other public services must be considered. |
| Keywords: | Local governments, term limits, yardstick competition, health insurance, poor, Philippines |
| JEL: | H72 I18 H4 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:phs:dpaper:201201&r=ias |
| By: | Wei Sun; Anthony Webb |
| Abstract: | The prospect of paying for nursing home care represents a significant financial risk for older Americans. Despite this risk, few individuals buy long-term care insurance and, since many lack the resources to pay out of pocket, they often turn to the means-tested Medicaid program. Concerned about growing Medicaid costs, many states have initiated “partnership” programs that offer a unique incentive for those who buy long-term care insurance: the state relaxes Medicaid’s asset test so that, if the private insurance benefits run out, individuals can retain more of their assets while still being eligible for Medicaid. This brief, which is based on a longer paper, estimates whether these enhanced insurance policies are likely to reduce Medicaid spending on single men and women. The brief is organized as follows. The first section describes the long-term care cost challenge and introduces the partnership programs. The second section explains the methodology for analyzing the programs’ impact on Medicaid outlays. The third section presents the results, which suggest that most of the buyers are those who would otherwise have purchased a traditional – unenhanced – policy. Thus, the final section concludes that, on balance, Medicaid will lose money on the partnership programs. |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:crr:issbrf:ib2013-6&r=ias |
| By: | World Bank |
| Keywords: | Insurance and Risk Mitigation Finance and Financial Sector Development - Debt Markets Private Sector Development - Emerging Markets Finance and Financial Sector Development - Currencies and Exchange Rates Finance and Financial Sector Development - Non Bank Financial Institutions |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:13221&r=ias |
| By: | World Bank |
| Keywords: | Finance and Financial Sector Development - Mutual Funds Finance and Financial Sector Development - Deposit Insurance Finance and Financial Sector Development - Debt Markets Private Sector Development - Emerging Markets Macroeconomics and Economic Growth - Markets and Market Access |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:12439&r=ias |