nep-ias New Economics Papers
on Insurance Economics
Issue of 2014‒05‒17
ten papers chosen by
Soumitra K Mallick
Indian Institute of Social Welfare and Business Management

  1. Weather risks and insurance opportunities for the rural poor: By Ceballos, Francisco; Robles, Miguel
  2. Universal Health Coverage and the Challenge of Informal Employment: Lessons from Developing Countries By Ricardo Bitran
  3. Unemployment Insurance in South Africa: A Descriptive Overview of Claimants and Claims By Haroon Bhorat; Sumayya Goga; David Tseng
  4. Gender, shocks, and resilience: By Kumar, Neha; Quisumbing, Agnes R.
  5. The Life Cycle Model with Recursive Utility: New insights on pension and life insurance contracts By Aase, Knut K.
  6. The Effect of Public Insurance Coverage for Childless Adults on Labor Supply By Laura Dague; Thomas DeLeire; Lindsey Leininger
  7. How Do Providers Respond to Public Health Insurance Expansions? Evidence from Adult Medicaid Dental Benefits By Thomas C. Buchmueller; Sarah Miller; Marko Vujicic
  8. Unemployment insurance in the presence of an informal By David Bardey; Fermando Jaramillo; Ximena Pena
  9. Medicare Advantage 2014 Spotlight: Enrollment Market Update. By Marsha Gold; Gretchen Jacobson; Anthony Damico; Tricia Neuman
  10. Does Extending Unemployment Benefits Improve Job Quality? By Arash Nekoei; Andrea Weber

  1. By: Ceballos, Francisco; Robles, Miguel
    Keywords: food security, Nutrition security, Weather, Insurance, Risk, Poverty, rural areas, resilience,
    Date: 2014
  2. By: Ricardo Bitran
    Abstract: The aim of the report is to review existing approaches and available policy options to improve access to health care services and financial protection against health shocks for informal-sector workers (ISWs). Along with their families, ISWs represent the majority of the population in many developing countries. The report reviews the definition and measurement of the informal sector and the literature on efforts toward its health insurance coverage. It also examines several country cases based on published and unpublished reports and on structured interviews of expert informants. Developing country efforts to expand health coverage are characterized by a common enrollment and financing pattern, starting with formal-sector workers and following with government-subsidized enrollment of the poor. Thus, ISWs are typically left behind and have been referred to as "the missing middle." They find themselves financially unprotected against health shocks and with limited access to quality and timely health care. ISWs are generally reluctant to enroll in insurance schemes, including social health insurance (SHI), community insurance, and other arrangements. Further, initiatives to enroll them in self-financed contributory schemes have generally resulted in adverse selection, as those with high anticipated health needs are more willing to pay and enroll than others. Successful initiatives to cover this population group are the ones where government has abandoned its expectations to derive relatively substantial revenue from it. Offering this group a benefits package that is relatively smaller than that of formal workers and charging them a premium that is only a fraction of that charged to formal workers is a strategy used by some countries to limit the need for public subsidies. While there is evidence that greater insurance coverage has improved access to health services for ISWs and their dependents, in several countries it has not yet improved financial protection for this target group. A broad set of reforms will be required to strengthen the supply side to ensure that additional public financing translates into improved coverage for ISWs.
    Keywords: absenteeism, access to health care, access to health care services, access to health services, access to services, administrative costs, adverse selection, adverse selection ... See More + problems, Ambulatory care, Capita Health Spending, casual employment, catastrophic expenditures, catastrophic health spending, child health, child health services, Choice of Health Financing System, chronic condition, cities, collection of contributions, Community health, contractual arrangements, costs of health care, delivery system, drugs, elderly people, Employee, Employer contribution, employment effects, Employment Status, enrollees, exposure, families, family income, financial incentives, financial protection, financial risk, financial viability, health care, health care delivery, health care providers, health care reform, HEALTH COVERAGE, Health Expenditure, health expenditures, health facilities, Health Financing, health insurance, health insurance fund, health insurance funds, Health Insurance Plan, health insurance program, Health Insurance Scheme, health insurance schemes, health needs, Health Organization, health policy, health providers, health results, health savings accounts, health sector, health services, health status, health system, health systems, health workers, Health-care, hospitals, household enterprises, household expenditure, household income, Household Survey, Human Development, illness, immigrants, impact evaluations, Income, income countries, income groups, income households, informal economy, INFORMAL EMPLOYMENT, informal sector, informal sector workers, insurance arrangements, insurance contributions, Insurance Plan, integration, jobs, labor force, labor market, Labor relations, Labor supply, Labour, laid-off workers, laws, legal protections, legal requirements, Low income, low-income countries, medical care, medical conditions, medical expenditures, Medical Insurance, medicines, migrants, monthly premium, moral hazard, National Health, National Health Insurance, nongovernmental organizations, Nutrition, outpatient care, outpatient services, patients, payroll tax, pocket payments, preliminary results, previous studies, private employment, private enterprises, private health insurance, private insurance, private insurers, Private providers, private sector, private sector workers, probability, production units, public health, public providers, public sector, public spending, quality of care, risk sharing, safety nets, Servants, social development, social health insurance, Social Security, Social security benefits, total employment, unemployed, unemployment, unemployment insurance, unintended consequence, universal health insurance coverage, unpaid workers, wage gap, worker, workers, working conditions, younger workers
    Date: 2014–01
  3. By: Haroon Bhorat; Sumayya Goga; David Tseng (Development Policy Research Unit; Director and Professor)
    Abstract: This study, primarily descriptive in nature, is one of the first to examine the claiming behaviour of unemployment benefit recipients within the South African Unemployment Insurance Fund system. In the period between 2005 and 2011, those with the lowest potential claim periods were also subject, on average, to lower absolute benefits compared to their wealthier counterparts.
    Keywords: Unemployment Insurance, Unemployment Benefits, Social Security Architecture, Claimants, Youth, Income Replacement, South Africa
    Date: 2013–12
  4. By: Kumar, Neha; Quisumbing, Agnes R.
    Keywords: Gender, Women, households, Risk, assets, income, Nutrition, malnutrition, Insurance, Social welfare, resilience, shocks, social protection, social safety nets,
    Date: 2014
  5. By: Aase, Knut K. (Dept. of Business and Management Science, Norwegian School of Economics)
    Abstract: For the conventional model with additive and separable expected utility, risk aversion and intertemporal elasticity of substitution in consumption sometimes play conflicting roles, in particular in life insurance and pensions. We propose to use recursive utility in the life cycle model, where we use the stochastic maximum principle to find the optimal solutions. This is a robust method which, among other things, do not require the Markov property. Optimal pension and life insurance contracts with these preferences involve consumption smoothing, not present in similar contracts using the conventional model. The model explains why aggregate consumption in society can be as smooth as implied by data, and at the same time be consistent with the relatively large, observed growth rate. Our analysis can also explain the prevalence of the two most common pension plans, defined benefit and defined contribution.
    Keywords: The life cycle model; recursive utility; optimal pension insurance; optimal life insurance; defined benefit; defined contribution; equity premium puzzle; the stochastic maximum principle
    JEL: D91
    Date: 2014–05–14
  6. By: Laura Dague; Thomas DeLeire; Lindsey Leininger
    Abstract: This study provides plausibly causal estimates of the effect of public insurance coverage on the employment of non-elderly, non-disabled adults without dependent children (“childless adults”). We use regression discontinuity and propensity score matching difference-in-differences methods to take advantage of the sudden imposition of an enrollment cap, comparing the labor supply of enrollees to eligible applicants on a waitlist. We find enrollment into public insurance leads to sizable and statistically meaningful reductions in employment up to at least 9 quarters later, with an estimated size of from 2 to 10 percentage points depending upon the model used.
    JEL: I13 J22
    Date: 2014–05
  7. By: Thomas C. Buchmueller; Sarah Miller; Marko Vujicic
    Abstract: A large and growing number of adults are covered by public insurance, and the Affordable Care Act is predicted to dramatically increase public coverage over the next several years. This study evaluates how such large increases in public coverage affect provider behavior and patient wait times by analyzing a common type of primary care: dental services. We find that when states add dental benefit to adult Medicaid coverage, dentists' participation in Medicaid increases and dentists see more publicly insured patients without decreasing the number of visits provided to privately insured patients. Dentists increase the total number of visits they supply each week while only modestly increasing the amount of time they spend working. They achieve this primarily by making greater use of dental hygienists. As a result, dentists' income increases. Wait times increase modestly, with the largest increases in wait times observed in states with restrictive scope of practice laws governing dental hygienists. These changes are most pronounced among dentists who practice in poor areas where Medicaid coverage is greatest.
    JEL: I11 I13 I18
    Date: 2014–04
  8. By: David Bardey; Fermando Jaramillo; Ximena Pena
    Abstract: Abstract: We study the effect of UI benefits in a typical developing country where the informal sector is sizeable and persistent. In a partial equilibrium environment, ruling out the macroeconomic consequences of UI benefits, we characterize the stationary equilibrium of an economy where policyholders may be employed in the formal sector, short-run unemployed receiving UI benefits or long-run unemployed without UI benefits. We perform comparative static exercises to understand how UI benefits affect unemployed workers' effort to secure a formal job, their labor supply in the informal sector and leisure time. Our model reveals that an increase in UI benefits generates two opposing effects for the short-run unemployed. First, since search efforts cannot be monitored it generates moral hazard behaviours that lower effort. Second, it generates an income effect as it reduces the marginal cost of searching for a formal job and increases effort. The overall effect is ambiguous and depends on the relative strength of these two e§ects. Additionally, we show that an increase in UI benefits increases the efforts of long-run unemployed workers. We provide a simple simulation exercise which suggests that the income effect pointed out is not necessarily of second-order importance in comparison with moral hazard strength. This result softens the widespread opinion, usually based on the microeconomic/partial equilibrium argument that the presence of dual labor markets is an obstacle to providing UI in developing countries.
    Keywords: Unemployment insurance, informal sector, income e§ect, developingcountries
    JEL: H55 I38 J65
    Date: 2013–09–03
  9. By: Marsha Gold; Gretchen Jacobson; Anthony Damico; Tricia Neuman
    Keywords: Medicare Advantage, Enrollment Market, 2014 Update, Health
    JEL: I
    Date: 2014–04–30
  10. By: Arash Nekoei; Andrea Weber
    Abstract: Contrary to the predictions of standard reservation-wage search models, empirical studies consistently find that an extension of unemployment insurance (UI) increases unemployment duration without improving subsequent wages. Our paper addresses this puzzle in two steps. First, using administrative data from Austria and an age-based regression discontinuity design, we show that an extension of UI eligibility by nine weeks increases the average reemployment wage by a statistically significant 0.5%. The magnitude of this effect is consistent with the behavior of an optimizing agent since new higher wages tend to persist. We find that the UI effect on both unemployment durations and reemployment wages is larger for individuals with a high ex-ante likelihood of benefit exhaustion and for those laid off during local industry-specific downturns. Second, we show both theoretically and empirically that the UI effect on expected wage is determined by two offsetting forces: (i) agents on UI increase their reservation wages, which raises subsequent wages, but (ii) they also stay unemployed longer and thus experience a greater decrease in job opportunities, which reduces subsequent wages. Together, these results show that UI does have an economically significant impact on job quality consistent with theoretical predictions. Connecting these results to a normative model of UI points to an overlooked welfare benefit: UI increases future tax revenue through higher wages. We show that this positive fiscal externality is of the same order of magnitude as the traditional negative moral-hazard externality emphasized in prior work. These results suggest that taking gains in job quality into account could significantly change the optimal generosity of UI.
    Date: 2014–04

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