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on Insurance Economics |
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Issue of 2015‒11‒21
ten papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Stefan Pichler (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Nicolas R. Ziebarth (Cornell University) |
| Abstract: | This paper proposes a test for the existence and degree of contagious presenteeism and negative externalities in sickness insurance schemes. First, we theoretically decompose moral hazard into shirking and contagious presenteeism behavior and derive testable conditions. Then, we implement the test exploiting German sick pay reforms and administrative industry-level data on certified sick leave by diagnoses. The labor supply adjustment for contagious diseases is significantly smaller than for non-contagious diseases. Lastly, using Google Flu data and the staggered implementation of US sick leave reforms, we show that flu rates decrease after employees gain access to paid sick leave. |
| Keywords: | Sickness Insurance, Paid Sick Leave, Presenteeism, Contagious Diseases, Infections, Negative Externalities, Shirking, US, Germany |
| JEL: | I12 I13 I18 J22 J28 J32 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:15-394&r=ias |
| By: | Bardey, David; Buitrago, Giancarlo |
| Abstract: | Countries that seek to provide universal health coverage deal with considerable publicly funded expenses. This article discusses if a private health insurance subsidy policy can reduce the expenses covered by the public system. A theoretical model is developed in which individuals are characterized by two dimensions: inherited risk of illness and preferences for prevention activities. It is shown that when beneficiaries of a voluntary plan have lower risk, i.e. advantageous selection scenario, a subsidy raises heath expenses if articulation between coverage is complementary. On the contrary, in adverse selection scenarios a subsidy reduces expenditure if articulation is supplementary. Intermediate scenarios are also considered where articulations between coverages have both complementary and supplementary components, which is apparently the case for the Colombian health system. Calibrated numerical simulations are provided using the Colombian system data. The calibration strategy employed reveals that selection is adverse in the Colombian voluntary health insurance market. Furthermore, we identify the level of subsidy and changes in articulation (towards supplementarity) that could lead to a reduction in public spending. |
| Keywords: | Health insurance, Regulation, Subsidies |
| JEL: | G22 I13 I18 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:29833&r=ias |
| By: | Pierre-Emmanuel Darpeix (PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics) |
| Abstract: | The literature generally agrees that the traditional insurance sector is not a source of systemic risk, and insurers are often considered to be shock absorbers rather than shock amplifiers. Yet, the evolution of the industry both in terms of structure (concentration of the reinsurers, increased linkages with banks, especially through bancassurance conglomerates) and in terms of techniques (securitization, monolines, derivatives) increased the systemic relevance of the insurers. |
| Keywords: | Insurance,Systemic risk,International regulation |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-01227969&r=ias |
| By: | Kleimeier S.; Qi S.; Sander H. (GSBE) |
| Abstract: | This paper examines the impact of deposit insurance DI schemes on bilateral cross-border deposits. Our results suggest that not only the existence of explicit DI, but also DI design features, which reflect its credibility have an impact on cross-border deposits, and that the relative differences between reporting and depositor countries also matter. More importantly, in times of crises, depositors rely more on DI in general, but DI acts primarily as a Safe Haven rather than enabling Regulatory Arbitrage. During the global financial crisis of 2008/09 the emergency actions of bank country governments, which supply and maintain these safe havens, have led to substantial relocations of cross-border deposits. |
| Keywords: | International Lending and Debt Problems; General Financial Markets: Government Policy and Regulation; |
| JEL: | F34 G18 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unm:umagsb:2015026&r=ias |
| By: | Geyer, Johannes; Haan, Peter; Korfhage, Thorben |
| Abstract: | Informal care by close family members is the main pillar of most long-term care systems. However, due to demographic ageing the need for long-term care is expected to increase while the informal care potential is expected to decline. From a budgetary perspective, informal care is often viewed as a cost-saving alternative to subsidized formal care. This view, however neglects that many family carers are of working age and face the difficulty to reconcile care and paid work which might entail sizable indirect fiscal effects related to forgone tax revenues, lower social security contributions and higher transfer payments. In this paper we use a structural model of labor supply and the choice of care arrangement to quantify these indirect fiscal effects of informal care. Moreover, based on the model we discuss the fiscal effects related to non-take-up of formal care. |
| Abstract: | Die Organisation der Altenpflege stützt sich in vielen Ländern auf die Bereitstellung informeller Pflege durch Familienangehörige. In alternden Gesellschaften gerät dieses System jedoch zunehmend unter Druck, da die Nachfrage nach Pflege steigt und gleichzeitig das Potenzial für Familienpflege sinkt. Die informelle Pflege wird aus fiskalpolitischer Sicht häufig als die kostengünstigste Variante der Altenpflege wahrgenommen. Die Bestimmung der gesamten fiskalischen Kosten erfordert jedoch eine Berücksichtigung von indirekte Kosten der informellen Pflege. Diese entstehen dadurch, dass viele pflegende Angehörige ihr Arbeitsangebot reduzieren, um auf die Doppelbelastung aus Pflege und Lohnarbeit zu reagieren. Dies führt zu geringeren Steuereinnahmen, reduzierten Sozialversicherungsbeiträgen und höheren Transferzahlungen. In dieser Studie nutzen wir ein strukturelles Modell des Arbeitsangebots und der Pflegearrangements, um diese indirekten fiskalischen Kosten zu quantifizieren. Darüber hinaus nutzen wir das Modell, um zusätzliche fiskalischen Effekte zu diskutieren, die durch eine Nichtinanspruchnahme (non-take up) von formeller ambulanter Pflege entstehen können. |
| Keywords: | labor supply,fiscal effects,long-term care insurance,structural model |
| JEL: | J22 H31 I13 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:584&r=ias |
| By: | Ilse Lindenlaub (New York University); Hector Chade (arizona state university) |
| Abstract: | Please see attached file |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed015:1371&r=ias |
| By: | Felix FitzRoy (University of St. Andrews); Jim Jin (University of St. Andrews) |
| Abstract: | With growing interest in a universal basic income (BI), we provide new results for a majority to benefit from replacing (some) unemployment benefits with BI. Given any income distribution and an extensive margin, such a replacement always benefits those remaining unemployed, raises utilitarian welfare, and benefits a poor - or even a working - majority. Similar results follow with involuntary unemployment, and joint distributions of wages and costs of work. Moreover, using quasi-linear utility with intensive margins, marginal introduction of BI can still benefit a large proportion of the poor whose productivities are below the average, without raising unemployment. |
| Keywords: | basic income, unemployment benefits, welfare |
| JEL: | D30 D60 H20 |
| URL: | http://d.repec.org/n?u=RePEc:san:wpecon:1508&r=ias |
| By: | Carter,Michael R.; Janzen,Sarah Ann |
| Abstract: | Climate risk is an important driver of long-term poverty dynamics, especially in rural regions. This paper builds a dynamic, multi-generation household model of consumption, accumulation, and risk management to draw out the full consequences of exposure to climate risk. The model incorporates the long-term impacts of consumption shortfalls, induced by the optimal ?asset smoothing? coping behavior of the vulnerable, on the human capital and long-term wellbeing of families. The analysis shows that the long-term level and depth of poverty can be improved by incorporating elements of ?vulnerability-targeted social protection? into a conventional system of social protection. The paper also explores the degree to which vulnerability-targeted social protection can be implemented through a subsidized insurance mechanism. The analysis shows that insurance-based vulnerability-targeted social protection dominates (in economic growth and poverty reduction measures) both in-kind transfer mechanisms and vulnerability-targeted protection paid for using a public budget. The relative gains brought about by this scheme of insurance-augmented social protection increase?at least for a while?under climate change scenarios. However, if climate change becomes too severe, then even this novel form of social protection loses its ability to stabilize the extent and depth of poverty. |
| Keywords: | Debt Markets,Regional Economic Development,Rural Poverty Reduction,Climate Change Economics |
| Date: | 2015–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7476&r=ias |
| By: | Clarke, Daniel J.; Kumar, Neha |
| Abstract: | Most index-based insurance products have been developed without giving explicit attention to gender. However, there is ample evidence that shocks affect men and women differently and that they allocate resources in different ways. In Bangladesh it is often assumed that women are less involved in agriculture, and therefore agricultural insurance might not be of interest to rural women. However, this assumption has not been tested in the field. This paper draws from a field research experiment to examine the gendered aspects of willingness to pay for index-based insurance in Bangladesh. Participants were presented with risky lotteries and a specific insurance contract and were asked to choose how much (if any) of the insurance they wanted to buy at a given price. The probability structure (whether the risk was catastrophic or moderate and whether there was high or low basis risk) varied within sessions. The price of the insurance varied across sessions. Each participant was also administered a short questionnaire, which collected information on demographic characteristics, risk preferences, agricultural risks, knowledge of insurance products, and asset ownership. Ninety-seven percent of the participants in the study decided to buy agricultural insurance, with no significant differences between men and women, even though women are less involved in agricultural decisionmaking. We find a small decrease in take-up for the low-probability event, driven by the women in the sample. When we examine the number of units bought, we find that men were likely to buy more units than women. Total wealth, as captured by total land owned, had no effect on units bought. However, among women total wealth mattered and had a positive correlation. Finally, we find that women had less education and lower financial literacy than their male counterparts, as well as less background in understanding agricultural risk. This placed them at a disadvantage when making insurance purchase decisions. |
| Keywords: | gender, women, insurance, risk, finance, index insurance, risk preference, economic shocks, Willingness to pay, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1465&r=ias |
| By: | Chen, Zeyuan (Department of Economic History, Lund University); Bengtsson, Tommy (Department of Economic History, Lund University); Helgertz, Jonas (Department of Economic History, Lund University) |
| Abstract: | Transitioning into retirement is an under-researched phenomenon in developing countries. Largely, this is linked to a predominance of contexts where – in particular – the rural population remains outside the coverage of any formal pension system. In 2008, China introduced the New Rural Social Pension (NRSP), a program which by now covers the majority of the Chinese rural elderly. This paper examines the effects of the NRSP on the labor supply of the elderly in rural China. As pension benefit eligibility at the time of its implementation is conditional on age, a regression discontinuity design is applied to investigate the casual effect of the receipt of pension benefits on labor supply. Furthermore, as the NRSP is neither means-tested nor conditions on retirement, it induces a pure income effect on employment. Using data from the China Health and Retirement Longitudinal Study, a nationally representative data set, we find that the receipt of pension benefits increases the probability of retirement among the rural elderly by around 15%. |
| Keywords: | China; New Rural Social Pension; Labor supply; Regression discontinuity; Retirement |
| JEL: | H55 J26 |
| Date: | 2015–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:luekhi:0139&r=ias |