nep-ias New Economics Papers
on Insurance Economics
Issue of 2014‒09‒25
seven papers chosen by
Soumitra K. Mallick
Indian Institute of Social Welfare and Business Management

  1. Health Care Demand in the Presence of Discrete Price Changes By Gerfin, M.;; Kaiser, B.;; Schmid, C.;
  2. Survival Analysis of Very Low Birth Weight Infant Mortality in Taiwan By Chang, C.; Chen, W.; McAleer, M.J.
  3. The Life and Work Of Martin Stuart (“Marty”) Feldstein By Charles Yuji Horioka
  4. Income redistribution in the European Union By Avram, Silvia; Levy, Horacio; Sutherland, Holly
  5. Labor Force Participation: Recent Developments and Future Prospects By Aaronson, Stephanie; Cajner, Tomaz; Fallick, Bruce C.; Galbis-Reig, Felix; Smith, Christopher; Wascher, William L.
  6. Can Removing the Tax Cap Save Social Security? By Shantanu Bagchi
  7. Does care to dependent elderly people living at home increase their mental health? By Thomas Barnay; Sandrine Juin

  1. By: Gerfin, M.;; Kaiser, B.;; Schmid, C.;
    Abstract: Deductibles in health insurance generate nonlinear budget sets and dynamic incentives. This paper uses detailed individual claims data from a large Swiss insurance company to estimate the response in health care demand to the discrete price increase that is generated by resetting the deductible at the start of each calendar year. We use a regression discontinuity type framework based on daily data to estimate the change in health care demand right before and right after the turn of the year. We find that for individuals with high deductibles health care demand drops by 27%, which translates into an elasticity of −.21. The decrease is most pronounced for inpatient care and prescription drugs. By contrast, for individuals with low deductibles there is no significant change in health care demand (except for prescription drugs). A remaining open question is whether the observed behavioral responses can be attributed to intertemporal substitution or whether they constitute a classic moral hazard effect.
    Keywords: health care demand; nonlinear pricing; dynamic incentives; health insurance;
    JEL: C31 D12 I13
    Date: 2014–08
  2. By: Chang, C.; Chen, W.; McAleer, M.J.
    Abstract: __Abstract__ This paper examines the determinants of very low birth weight infant (or neonatal) mortality using the Taiwan National Health Insurance Research database from 1997 to 2009. After infants are discharged from hospital, it is not possible to track their mortality, so the Cox proportional hazard model is used to analyze the very low birth weight infant mortality rate. In order to clarify treatment responsibility and to avoid selective referral effects, we use the number of infants treated in the preceding five years to observe the effect of a physician’s and hospital’s medical experience on the mortality rate of hospitalized minimal birth weight infants. The empirical results show that, given disease control variables, a higher infant weight, higher quality hospitals, increased hospital medical experience, and higher investment in pediatrics can reduce the mortality rate significantly. However, an increased physician’s medical experience does not seem to influence significantly the very low birth weight infant mortality rate.
    Keywords: Very low birth weight, Neonatal mortality, Physician’s infant experience, Hospital infant experience, Statistical analysis, Cox proportional hazard model, Selective referral, Taiwan National Health Insurance Scheme
    JEL: C14 I10 I18
    Date: 2014–06–01
  3. By: Charles Yuji Horioka (School of Economics, University of the Philippines Diliman)
    Abstract: Martin Stuart (“Marty”) Feldstein, currently George F. Baker Professor of Economics at Harvard University and President Emeritus of the National Bureau of Economic Research, Inc. (NBER), is a renowned American economist who has made important contributions to public finance, macroeconomics, social insurance, health economics, the economics of national security, and many other fields of economics.
    Keywords: Capital accumulation, capital flows, capital gains, capital mobility, charitable contributions, Council of Economic Advisers, depreciation, Feldstein-Horioka paradox, Feldstein-Horioka puzzle, Harvard University, health economics, health insurance
    JEL: B31 D14 D22 F21 F32 F52 H20 H55 I13 J65
    Date: 2014–07
  4. By: Avram, Silvia; Levy, Horacio; Sutherland, Holly
    Abstract: The systems of direct taxes and cash benefits in the 27 Member States of the European Union (EU) vary considerably in size and structure. We explore their redistributive effects using EUROMOD, the tax-benefit microsimulation model for the EU. As well as describing redistributive effects in aggregate this allows us to assess and compare the effectiveness of individual types of policy in reducing income disparities. We consider the following categories of benefits and taxes: income taxes, tax allowances, tax credits, social contributions, cash benefits designed to target the poor or redistribute inter-personally (through means-testing) as well as cash benefits intended to redistribute intra-personally across the lifecycle (through social insurance or contingency-based entitlement). We derive results for the 27 members of the European Union using policies in effect in 2010 and present them for each country separately as well as for the EU as a whole.
    Date: 2014–04–30
  5. By: Aaronson, Stephanie (Board of Governors of the Federal Reserve System (U.S.)); Cajner, Tomaz (Board of Governors of the Federal Reserve System (U.S.)); Fallick, Bruce C. (Federal Reserve Bank of Cleveland); Galbis-Reig, Felix (Board of Governors of the Federal Reserve System (U.S.)); Smith, Christopher (Board of Governors of the Federal Reserve System (U.S.)); Wascher, William L. (Board of Governors of the Federal Reserve System (U.S.))
    Abstract: Since 2007, the labor force participation rate has fallen from about 66 percent to about 63 percent. The sources of this decline have been widely debated among academics and policymakers, with some arguing that the participation rate is depressed due to weak labor demand while others argue that the decline was inevitable due to structural forces such as the aging of the population. In this paper, we use a variety of approaches to assess reasons for the decline in participation. Although these approaches yield somewhat different estimates of the extent to which the recent decline in participation reflects cyclical weakness rather than structural factors, our overall assessment is that much - but not all - of the decline in the labor force participation rate since 2007 is structural in nature. As a result, while we see some of the current low level of the participation rate as indicative of labor market slack, we do not expect the participation rate to show a substantial increase from current levels as labor market conditions continue to improve.
    Keywords: Labor force participation; retirement behavior; disability insurance; implications of an aging population; youth employment; labor market slack; labor market fluctuations and the business cycle
    Date: 2014–09–01
  6. By: Shantanu Bagchi (Department of Economics, Towson University)
    Abstract: The maximum amount of earnings in a calendar year that can be taxed by Social Security in the U.S. is currently capped at $106,800. In this paper, I use a general-equilibrium overlapping-generations model to examine if removing this cap can solve Social Security's budgetary problems. I find that in general, removal of the cap increases Social Security revenues, but by only a small percentage, and most of these extra revenues go towards paying benefits to high-income retirees no longer subject to the cap. Even when the cap is removed only from taxes but retained on the amount of earnings creditable towards Social Security benefits, the fiscal advantages are quite small.
    Keywords: Social Security, Tax cap, Mortality risk, Productivity shock, Partial insurance, general equilibrium.
    JEL: E21 E62 H55
    Date: 2014–09
  7. By: Thomas Barnay; Sandrine Juin
    Date: 2014

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