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on Insurance Economics |
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Issue of 2014‒01‒10
four papers chosen by Soumitra K Mallick Indian Institute of Social Welfare and Business Management |
| By: | Marika Cabral; Neale Mahoney |
| Abstract: | Most health insurance policies use cost-sharing to reduce excess utilization. The purchase of supplemental insurance can blunt the impact of this cost-sharing, potentially increasing utilization and exerting a negative externality on the primary insurance provider. This paper estimates the effect of private Medigap supplemental insurance on public Medicare spending using Medigap premium discontinuities in local medical markets that span state boundaries. Using administrative data on the universe of Medicare beneficiaries, we estimate that Medigap increases an individual’s Medicare spending by 22.2%. We find that the take-up of Medigap is price sensitive with an estimated demand elasticity of -1.8. Using these estimates, we calculate that a 15% tax on Medigap premiums would generate combined tax revenue and cost savings of $12.9 billion annually. A Pigouvian tax would generate combined annual savings of $31.6 billion. |
| JEL: | H2 I13 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19787&r=ias |
| By: | Gesmar Rosa dos Santos; Alexandre Gervásio de Sousa; Gustavo Alvarenga |
| Abstract: | Em função do seu papel amenizador de prejuízos dos agricultores, o seguro agrícola é de grande importância para a agricultura de um país. Por outro lado, o fato deste seguro representar apenas 0,4% do montante do mercado de seguros no Brasil indica um grande espaço para crescer. Tais mercados, inclusive no plano internacional, guardam profunda relação de dependência do fomento público. Neste sentido, o Programa de Subvenção ao Prêmio do Seguro Rural (PSR), gerido pelo governo federal, tem sido o maior incentivo para a adesão de seguradoras e agricultores. Assim, este trabalho analisa o PSR com base em dados oficiais do período 2006-2011, a partir dos aspectos descritivos e de tabulações que permitem uma análise pautada nos objetivos do programa. Observou-se que este mercado se restringia a 294 municípios e a sete estados, no ano 2011, destacando-se que o mercado tem médio padrão de incentivos e reflete a estrutura de combinação de mecanismos de governo com as estratégias das seguradoras para a venda de seguros. Conclui-se, por um lado, que o PSR é uma ação essencial para o desenvolvimento do seguro agrícola no Brasil, mas, por outro lado, observou-se que o mercado conta com a possibilidade de avanços com suas próprias forças, havendo margem operacional para isto. Quando os dados são analisados por região ou estado produtor e por tipo de cultivo, evidencia-se baixa concorrência na oferta de seguros e uma grande concentração das operações em poucas seguradoras. A descontinuidade do incremento na subvenção, após ter sido reduzida em 23,4% de 2009 para 2010, deixou sequelas tanto nos operadores quanto nos produtores, por ter contrariado o aprendizado coletivo, trazendo insegurança em relação a montantes e prazos de liberação da ajuda ao prêmio. Entre as sugestões apontadas pelo estudo, esta descontinuidade é questão central a ser enfrentada pelos gestores, aliada a medidas de crescimento do mercado, qualificação da demanda e maior concorrência. Agricultural insurance is of great importance to agriculture of a country in terms of its role for farmers rent. Moreover, the fact that the crop insurance represent only 0.4% of the amount of the insurance market in Brazil indicates a large space to grow. Such markets, including internationally, keep deep relationship of dependence on public support. In this sense, the insurance premium subvention program (PSR), a federal government initiative, has been a major incentive for insurers and farmers adhesion. This study describes the trajectory of the PSR from the point of view of the government action, focused on descriptive aspects that allow the analysis of the goals of the program. We analyze the PSR based on official data from the period 2006-2011. It was observed that this market is limited to 294 municipalities and seven states in the year 2011. Another point worth noting is that the data reflect a market size with standard incentives, but also reflects the combination of mechanisms and strategies of insurers to enhance their sales. One issue to be resolved by the government relates to uncertainty about the amounts and timing of release of insurance premium subvention. The discontinuity of the increase in subsidy, having been reduced by 23.4%, from 2009 to 2010, left consequences in both the producers and insurers. We conclude that the PSR is an essential action for the development of agricultural insurance in Brazil. Moreover, it was observed that the market has the ability to progress with its own forces, because it has a reasonable operational margin. When the data is analyzed regionally and by type of crop they highlight the low competition in the insurance offer and a large concentration of operations in a few insurers. |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:1910&r=ias |
| By: | Ratner, David (Board of Governors of the Federal Reserve System (U.S.)) |
| Abstract: | Unemployment insurance experience rating imposes higher payroll tax rates on firms that have laid off more workers in the past. To analyze the effects of UI tax policy on labor market dynamics, this paper develops a search model of unemployment with heterogeneous firms and realistic UI financing. The model predicts that higher experience rating reduces both job creation and job destruction. Using firm-level data from the Quarterly Census of Employment and Wages, the model is tested by comparing job creation and job destruction across states and industries with different UI tax schedules. The empirical analysis shows a strong negative relationship between job flows and experience rating. Consistent with the empirical results, comparative steady state tax experiments show that a 5% increase in experience rating reduces job flows by an average of 1.4%. While the unemployment rate falls on average by .21 percentage points, the effect on tax revenues is ambiguous. The model has implications for UI financing reform currently being considered at the state and national level. Two alternative reforms that close half of the UI financing gap are considered: the reform that increases experience rating is shown to improve labor market outcomes. In a version of the model with aggregate shocks, higher experience rating dampens the response of layoffs and unemployment over the business cycle. Experience rating also induces nonlinear responses of unemployment to proportionally larger shocks as well as asymmetry in response to booms and busts. |
| Keywords: | Unemployment insurance; experience rating |
| Date: | 2014–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2013-86&r=ias |
| By: | Lena Giesbert; Susan Steiner |
| Abstract: | Abstract India has one of the highest underweight burdens in the world, with signs of rising obesity. Coexistence of underweight and overweight women is symptomatic of the double burden of malnutrition. The present study aims to throw new light on the double burden of malnuThe uptake of microinsurance in developing countries falls short of projections, which has recently made stakeholders focus on client value. However, empirical research on what constitutes client value in microinsurance has been limited. As a starting point for further investigations, we draw a first conceptual sketch of the dimensions of client value. Our analysis is based on qualitative data from focus group discussions among both existing and potential clients of a micro life insurance in southern Ghana. Using a multidimensional approach, we show that client value is based on the perceived quality, costs and consumption outcome, as well as the emotional and social value of micro life insurance. In their value judgments, focus group participants particularly emphasize the quality of customer service provision, the (expected) insurance benefits, and positive emotions associated with insurance coverage. The evaluation of the value of the microinsurance under study is mixed. We therefore also investigate why clients form the value perceptions they do. This investigation finds that large discrepancies between people’s expectations and experiences reduce the perceived value of the insurance product. It shows that contextual factors, such as clients’ knowledge about insurance, their interaction with peers, and the availability and effectiveness of alternative risk management options, largely shape whether they perceive high or low value in micro life insurance.trition among Indian women in the age group 22-49 years. The analysis is based on a nationally representative household survey, InAlthough growth has improved substantially in most African countries in recent years, poverty across the continent has fallen very little in the aggregate, even though there have been outstanding performances by some countries. Indeed, some African countries have slipped back, and exhibit higher poverty rates than in 1990. This paper seeks to understand the reasons for this variance between countries; the reasons why, certainly if one uses headcount poverty data, there are ‘two Africas’, one with powerful ability to reduce poverty and one without. We argue that some of the reasons for this difference are rooted in colonial times, and those countries which developed dynamic exports of smallholder cash crops, the ‘peasant export economies’, received a headstart in relation to mineral- and large farm-based economies, because of the more equitable income distribution which labour-intensive, smallholder-based economies generate. However, in the post-colonial period, many peasant export economies wasted this headstart, and some mine/plantation economies were able to transcend the limitation of not having received one. The key reasons for this evolution, we argue, lie in the motivation and ability of African elites to form pro-poor coalitions, which in some cases were then able to implement tax and expenditure policies with the ability to bring a pro-poor pattern of growth into being. This story is tested both econometrically and by means of four contrasted country case studies.dia Human Development Survey, 2005. The results indicate that the factors underlying this burden include socio-economic status (SES), location, marital status, age, education, physical activity, media exposure, and dietary composition and frequency of eating. We find that there is a socio-economic patterning of underweight and overweight women, with a large concentration of underweight women among those with a low SES and of overweight women among high SES. Given that the health implications of being underweight and overweight are grim, it is imperative that there is a simultaneous increase in the focus on the health needs of overweight and obese people and on the needs of the large number of severely undernourished people in society. For Indian women, the glaring health/nutrition disparities are matched only by the grimness of their existence and survival prospects. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:19214&r=ias |