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on Insurance Economics |
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Issue of 2015‒07‒25
twenty papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | World Bank |
| Keywords: | Insurance and Risk Mitigation Macroeconomics and Economic Growth - Climate Change Economics Finance and Financial Sector Development - Debt Markets Law and Development - Insurance Law Urban Development - Hazard Risk Management |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21694&r=ias |
| By: | Yilmaz Arguden |
| Keywords: | Insurance and Risk Mitigation Law and Development - Insurance Law Social Protections and Labor - Labor Policies Law and Development - Corporate Law Private Sector Development - E-Business Finance and Financial Sector Development |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21700&r=ias |
| By: | World Bank |
| Keywords: | Insurance and Risk Mitigation Macroeconomics and Economic Growth - Climate Change Economics Finance and Financial Sector Development - Debt Markets Law and Development - Insurance Law Urban Development - Hazard Risk Management |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21696&r=ias |
| By: | World Bank Group; Global Facility for Disaster Reduction and Recovery |
| Keywords: | Insurance Risk Mitigation Urban Development - Hazard Risk Management Environment - Natural Disasters Conflict and Development - Disaster Management Finance and Financial Sector Development - Debt Markets |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21920&r=ias |
| By: | Ellul, Andrew; Pagano, Marco; Schivardi, Fabiano |
| Abstract: | We investigate the determinants of firms’ implicit employment and wage insurance to employees, using a difference-in-difference approach: we rely on differences between family and non-family firms to identify the supply of insurance, and exploit variation in unemployment insurance programs across and within countries to gauge workers’ demand for insurance. Using a firm-level panel from 41 countries, we find that family firms provide more stable employment than non-family ones, and in exchange they obtain both greater wage flexibility and lower labor cost: on average, their real wages are 5 percent lower, controlling for country, industry and time effects. The additional employment security provided by family firms is greater, and the wage discount larger, the less generous is public unemployment insurance: private and public provision of employment insurance appear to be substitutes. |
| Keywords: | family firms; insurance; risk-sharing; social security; unemployment; wages |
| JEL: | G31 G32 G38 H25 H26 M40 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10711&r=ias |
| By: | World Bank Group |
| Keywords: | Insurance and Risk Mitigation Urban Development - Hazard Risk Management Social Protections and Labor - Labor Policies Environment - Natural Disasters Finance and Financial Sector Development - Non Bank Financial Institutions |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21705&r=ias |
| By: | Ole Peters; Alexander Adamou |
| Abstract: | We present a mathematical solution to the insurance puzzle. Our solution only uses time-average growth rates and makes no reference to risk preferences. The insurance puzzle is this: according to the expectation value of wealth, buying insurance is only rational at a price that makes it irrational to sell insurance. There is no price that is beneficial to both the buyer and the seller of an insurance contract. The puzzle why insurance contracts exist is traditionally resolved by appealing to utility theory, asymmetric information, or a mix of both. Here we note that the expectation value is the wrong starting point -- a legacy from the early days of probability theory. It is the wrong starting point because not even the most basic models of wealth (random walks) are stationary, and what the individual experiences over time is not the expectation value. We use the standard model of noisy exponential growth and compute time-average growth rates instead of expectation values of wealth. In this new paradigm insurance contracts exist that are beneficial for both parties. |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1507.04655&r=ias |
| By: | World Bank |
| Keywords: | Insurance and Risk Mitigation Macroeconomics and Economic Growth - Climate Change Economics Banks and Banking Reform Urban Development - Hazard Risk Management Environment - Natural Disasters Finance and Financial Sector Development - Debt Markets Finance and Financial Sector Development - Non Bank Financial Institutions Finance and Financial Sector Development - Bankruptcy and Resolution of Financial Distress Finance and Financial Sector Development - Financial Intermediation Law and Development - Insurance Law |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21695&r=ias |
| By: | World Bank |
| Keywords: | Insurance and Risk Mitigation Macroeconomics and Economic Growth - Climate Change Economics Environment - Natural Disasters Finance and Financial Sector Development - Debt Markets Urban Development - Hazard Risk Management |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21693&r=ias |
| By: | Tom Krebs (Universitat Mannheim); Moritz Kuhn (University of Bonn); Mark Wright (University of California, Los Angeles) |
| Abstract: | We use data from the Survey of Consumer Finance and Survey of Income Program Participation to show that young households with children are under-insured against the risk that an adult member of the household dies. We develop a tractable macroeconomic model with human capital risk, age-dependent returns to human capital investment, and endogenous borrowing constraints due to the limited pledgeability of human capital. We show analytically that, consistent with the life insurance data, in equilibrium young households are borrowing constrained and under-insured. A calibrated version of the model can quantitatively account for the life-cycle variation of life-insurance holdings, financial wealth, earnings, and consumption inequality observed in the US data. Our analysis implies that a reform that makes consumer bankruptcy more costly, like the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, leads to a substantial increase in the volume of both credit and insurance. |
| Keywords: | human capital risk, limited enforcement, life insurance |
| JEL: | E21 E24 D52 J24 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2015-010&r=ias |
| By: | World Bank |
| Keywords: | Insurance and Risk Mitigation Macroeconomics and Economic Growth - Climate Change Economics Finance and Financial Sector Development - Debt Markets Urban Development - Hazard Risk Management Banks and Banking Reform |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21697&r=ias |
| By: | Martin Gonzalez-Rozada; Hernan Ruffo |
| Abstract: | We evaluate the effects of unemployment insurance policy (UI) in Argentina using administrative data and exploiting policy reforms around 2006-2007. We find that the extension of UI eligibility increases significantly and substantially unemployment duration while reemployment wages are only modestly increased. On the other hand, a rise in UI transfers of the same expected cost affects re-employment wages more and unemployment duration less. Finally, using reforms to severance pay we show that liquidity provision generates a substantial effect. We use different optimality formulas derived from search models to evaluate the welfare gains of changing UI and we focus on the trade-off between providing larger or longer transfers. After calibrating these formulas we conclude that for the average worker transfers should increase but UI duration should be shortened. |
| Keywords: | Unemployment Insurance, Severance Payments, Regression discontinuity |
| JEL: | C41 I38 J64 J65 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:udt:wpecon:wp201403&r=ias |
| By: | Melanie Morten (Stanford University); Corina Mommaerts (Yale University); Ahmed Mobarak (Yale University); Costas Meghir (Yale University) |
| Abstract: | We investigate the relationship between seasonal migration and informal risk sharing in rural Bangladesh. We use data from a randomized controlled trial which provided incentives for households to migrate (Bryan et al., 2014). Using this experimental variation, we first provide evidence of the effect of decreasing migration costs on endogenous risk sharing in the village. We then investigate the mechanisms of this effect. We undertake a semi-parametric analysis of the source of income shocks, source of insurance and measurement error. Next, we characterize a dynamic model of migration and endogenous risk sharing, incorporating investment in learning about migration possibilities. Estimation of the model is in progress; we plan to analyze the welfare effect of alternative policies to encourage migration, such as access to credit and further reductions in the cost of migrating. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:190&r=ias |
| By: | Peter Mueser (University of Missouri); Marios Michaelides (University of Cyprus) |
| Abstract: | We report the results of a random assignment study of a reemployment program implemented in the United States during the Great Recession. The program expedited participant exit from Unemployment Insurance (UI), produced significant UI savings, and improved participant employment rates and earnings. These effects are associated with: (1) increased participant UI exit prior to services receipt, indicating an effect due to participant efforts to avoid program requirements; and (2) greater exit subsequent to services, implying that the services themselves helped participants conduct an effective job search. Our findings provide compelling evidence that reemployment programs can be effective during recessions. |
| Keywords: | Great Recession, job search services, unemployment, unemployment compensation, program evaluation. |
| JEL: | J6 H4 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:1509&r=ias |
| By: | Feyen,Erik H.B.; Ghosh,Swati R.; Kibuuka,Katie; Farazi,Subika |
| Abstract: | Using the universe of all externally issued bonds by corporates and sovereigns in emerging and developing economies during 2000-14, this paper analyzes various issuance trends, including the unprecedented post-crisis surge. The paper focuses on external issuance at the country-industry and individual bond levels and finds that global factors matter greatly for emerging and developing economies issuance. A decrease in U.S. expected equity market (or interest rate) volatility, U.S. corporate credit spreads, and U.S. interbank funding costs and an increase in the Federal Reserve?s balance sheet (i) raise the odds that the monthly issuance volume of a country-industry is above its historical average; (ii) decrease individual bond yields and spreads; and (iii) raise bond maturities, after controlling for country pull factors, bond characteristics (for example, type of issuer, industry, and riskiness). Additionally, we document support that the risk-taking channel of exchange rate appreciation also operates for external bond issuance. Moreover, while the paper finds that country pull factors affect the impact of global factors, it does not find consistent evidence for this across the board. This result suggests that, during loose global funding conditions, flows are mostly driven by push factors and do not systematically discriminate between emerging and developing economies. Taken together, the findings suggest that although issuers might be able to benefit from benign international funding conditions, the large issuance volumes, currency risks, and high exposure to global factors could pose external and domestic challenges for policy makers, particularly when global cycles reverse. |
| Keywords: | Deposit Insurance,Debt Markets,Banks&Banking Reform,Emerging Markets,Currencies and Exchange Rates |
| Date: | 2015–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7363&r=ias |
| By: | Congressional Budget Office |
| Abstract: | CBO and the staff of the Joint Committee on Taxation have analyzed the main budgetary and economic effects of repealing the Affordable Care Act and concluded that doing so would probably increase federal deficits over the next decade, whether or not macroeconomic feedback to the budget is included. Such feedback would reduce deficits, but would not offset the increases in deficits stemming from the other effects of repealing the ACA. |
| JEL: | H20 H40 I11 I13 I18 |
| Date: | 2015–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:cbo:report:50252&r=ias |
| By: | World Bank |
| Keywords: | Health Monitoring Evaluation Disease Control Prevention Health Systems Development Reform Health Economics Finance Health, Nutrition and Population - Population Policies |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:21891&r=ias |
| By: | Robert L. Clark; Emma Hanson; Melinda Sandler Morrill; Aditi Pathak |
| Abstract: | Unlike private sector employers, public school districts generally offer more than one type of supplemental retirement savings plan and allow multiple vendors to offer products. Using individual-level payroll data from over half of the public school districts in North Carolina coupled with data from an employer survey, this study examines the impact of inter-district differences in supplemental plan administration on participation in these savings vehicles. We find wide variation in total participation rates and in 403(b) plan participation rates in particular, even among this population of public-sector workers with the same defined benefit pension plan, health plan, and retiree health coverage. Individual and district characteristics explain some, but not all, of the variation observed. |
| JEL: | H75 J26 J45 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21382&r=ias |
| By: | Tania Burchardt; Polly Vizard |
| Abstract: | The report uses the Adult Inpatient Survey 2012 to build up an in-depth quantitative evidence base on older people's experiences of dignity and nutrition during hospital stays in England. The survey covers adults aged 16 or above who stay in hospital for at least one night. The research has been funded by the Economic and Social Research Council, Research Grant ES/K004018/1. |
| Keywords: | dignity,nutrition,elderly,social care,health |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticab:34&r=ias |
| By: | Keunock Lew (Seoul National University of Science & Technology); Seungryul Ma (Government Employees Pension Foundation) |
| Abstract: | The paper conducted a concurrent simulation analysis to evaluate guarantor's risk in the reverse mortgage annuity program, considering that key variables of the program change simultaneously with their own stochastic processes. From the analysis with the data covering a period from September 2004 to December 2014, it was revealed that the probability of the guarantor having net liability (or net loss) turned out almost nothing (ie. merely 3.65%). Therefore, it is interpreted that the current program was designed very safely for the interest of guarantor and has room to increase monthly payment for annuitants. We also evaluated the effect of individual variable’s volatility on the magnitude of guarantor's total risk. From the analysis, it was confirmed that the current reverse mortgage program was designed to offset longevity risk which may increase with the period mortality rate of 2013 life table by market risk which can decrease with assuming low growth rate of housing price and high level of loan rates. The concurrent simulation is viewed as a more realistic way for evaluating guarantor’s risk because it assumes key variables to change simultaneously with their interdependency in the analysis. Therefore, the concurrent simulation results could give more rational implications to the government's policy makers as well as the reverse mortgage annuity market. |
| Keywords: | Reverse Mortgage Annuity, Stochastic Process, Guarantor Risk Evaluation, Concurrent Simulation |
| JEL: | G20 G22 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:2604041&r=ias |