nep-ias New Economics Papers
on Insurance Economics
Issue of 2016‒06‒18
eight papers chosen by
Soumitra K. Mallick
Indian Institute of Social Welfare and Business Management

  1. Time-consistent unemployment insurance By Kankanamge, Sumudu; Weitzenblum, Thomas
  2. A Narrative Account of Legislated Social Security Changes for Germany By Sebastian Gechert; Christoph Paetz; Paloma Villanueva
  3. Agricultural Production, Weather Variability, and Technical Change: 40 Years of Evidence from Indi By Michler, Jeffrey; Shively, Gerald
  4. Saving for old age By Demirguc-Kunt,Asli; Klapper,Leora; Panos,Georgios A.
  5. Suivi de la collecte et des placements des 12 principaux assureurs-vie à fin décembre 2015. By Kora-Yarou N.; Malgras F.; Bontemps-Chanel A.-L.
  6. Optimal revelation of life-changing information By Schweizer, Nikolaus; Szech, Nora
  7. Macroeconomics and Household Heterogeneity By Perri, Fabrizio; Krueger, Dirk; Mitman, Kurt
  8. Evaluation of Health Care Innovation Awards (HCIA): Primary Care Redesign Programs First Annual Report, Volume II: Individual Program Summarires By Boyd Gilman; Sheila Hoag; Lorenzo Moreno; Greg Peterson; Linda Barterian; Laura Blue; Kristin Geonnotti; Tricia Higgins; Mynti Hossain; Lauren Hula; Rosalind Keith; Jennifer Lyons; Brenda Natzke; Brenna Rabel; Rumin Sarwar; Rachel Shapiro; Cara Stephanczuk; Victoria Peebles; KeriAnn Wells; Joseph Zickafoose

  1. By: Kankanamge, Sumudu; Weitzenblum, Thomas
    Abstract: This paper examines the optimal time-consistent unemployment insurance policy in a search economy with incomplete markets. In a context of repeated choice without a commitment device, we show that the optimal replacement rate depends on how frequently in time the policy can be revised. The exact relation is dependent on the political process: if the utilitarian welfare criterion is used, the optimal rate is higher the shorter the choice periodicity. Self-insurance reduces the need for the public scheme but mostly because the policy cannot be changed often enough. The comparison with an economy where a commitment device is assumed shows that the commitment rate is close to time-consistent rates with very long choice periodicities.
    JEL: C63 E61 J65
    Date: 2016–05
  2. By: Sebastian Gechert; Christoph Paetz; Paloma Villanueva
    Abstract: Exploiting official historical records of the German Bundestag and Bundesrat, the Federal Ministry of Labour and Social Affairs and the German statutory pension insurance scheme, we construct a narrative of legislated social security changes for Germany between 1970 and 2013 in order to identify important discretionary shocks to the social security system. The historical account covers major changes in transfers and social security benefits and contributions for pensions, health care, long-term care and unemployment insurance on the German federal level and thus complements the tax narrative of Uhl (2013). Based on the provided information we are able to code a rich bottom-up time-series of fiscal policy shocks for empirical macroeconomic analysis, addressing the identification problem. Therefore, we collect information regarding the underlying motivation, the dates of the legislative process and the prospective financial impact, closely following the methodology of Romer and Romer (2010) and Uhl (2013).
    Keywords: Narrative Record Identification, Action-Based Approach, Social Security
    JEL: E62 H20 H30 H55 N00
    Date: 2016
  3. By: Michler, Jeffrey; Shively, Gerald
    Abstract: We pose the simple question: how large of a role does the weather play in determining variability of agricultural production in India? Despite the long standing interest in agricultural economics of estimating the effect of weather on crop output, few quantitative measures of impact exist. We use a long panel of parcel level data from six villages in India that covers $44$ seasons from 1976 to 2011. Estimation the impact of weather variability on yield is complicated by the role of technological change over this period. In our descriptive analysis we generate several stylized facts about how agricultural production in the subcontinent has changed over the last $40$ years. Most importantly, mean yields have increased and the variance in crop production, measured relative to the mean, has decreased. In a regression context, using a multilevel model, we find strong evidence of technical change and that weather variability makes up only a small share of total variability in yield. We conclude that Green Revolution technologies have reduced the amount of weather related risk faced by farmers, even when we account for greater amounts of variation in weather due to climate change
    Keywords: Weather Risk, Agricultural Production, Technical Change, Multilevel Models, Rural India, Agricultural and Food Policy, Crop Production/Industries, International Development, Production Economics, Risk and Uncertainty, C11, D81, O12, O13, Q16, Q12,
    Date: 2016
  4. By: Demirguc-Kunt,Asli; Klapper,Leora; Panos,Georgios A.
    Abstract: Countries around the world face a retirement crisis brought on by aging populations, declining birthrates, and fiscal shortfalls. As a result, policy makers increasingly seek to understand retirement savings patterns, a crucial component of the safety net for the elderly. Drawing on the 2014 Global Findex database, which provides individual-level data on the use of financial products in more than 140 countries, this paper examines how adults save for old age. It finds that about 25 percent of adults worldwide save for old age, with rates exceeding 35 percent in high-income Organisation for Economic Co-operation and Development economies and the East Asia and Pacific region. On average, men are slightly more likely than women to save for this purpose, but the gender gap is deeper in developing countries. Worldwide, saving for old age is more common among older adults, more educated adults, and adults who own accounts. Adults in countries with English legal origin, and with high savings rates, are also more likely to save for old age. The paper also finds that measures to increase trust in the financial system, such as the safety net/moral hazard index based on deposit insurance, lead to higher rates of saving for old age. Finally, the paper finds little evidence of substitution between pension system provisions and contribution rates with saving for old age.
    Keywords: Financial Literacy,Population&Development,Access to Finance,Emerging Markets,Youth and Government
    Date: 2016–06–02
  5. By: Kora-Yarou N.; Malgras F.; Bontemps-Chanel A.-L.
    Abstract: Au quatrième trimestre 2015, la collecte nette en assurance vie des douze principaux assureurs-vie sous-revue1 est restée stable par rapport au trimestre précédent à 2,6 milliards d’euros, mais nettement supérieure (+44%) aux montants collectés sur la même période en 2014. La bonne tenue de cette collecte nette s’explique par une augmentation des primes plus marquée que celle des rachats et autres prestations. Alors que les unités de compte (UC) avaient renforcé leur proportion dans la collecte nette au cours des deux trimestres précédents, celle-ci baisse au dernier trimestre 2015, passant de 64% à 44% au profit des contrats en euros. D’une année sur l’autre, la collecte en euro passe de 6,2 milliards d’euros à 4,4 milliards d’euros et la collecte en UC de 3,1 milliards d’euros à 6,5 milliards d’euros. Les encours de placements en valeur nette comptable progressent pour leur part de 2,2% au dernier trimestre (1 402 milliards d’euros en raison d’un changement de périmètre). La répartition des placements par type de contrepartie des 12 principaux assureurs vie évolue très lentement. La tendance observée les trimestres précédents est cependant confirmée : l’exposition aux placements souverains et aux obligations bancaires diminuent (resp. -1,3 points et -0,6 point sur une année glissante) au profit des autres obligations et titres assimilés (+1,6 points) des entreprises non financières. Le stock de plus-values latentes des douze principaux assureurs-vie français repart à la hausse (+5%) après deux trimestres de baisse, tirée par les plus-values sur les actions et titres assimilés (+50%) et sur les titres immobiliers (+13%). Les plus-values réalisées continuent leur repli (baisse de 36% par rapport au trimestre précédent). La valeur de réalisation de l’encours de placements progresse de 2,4% (et atteint 1 551 milliards d’euros après mise en transparence des titres détenus dans les organismes de placement collectif). La part investie en titres souverains de l’Union européenne et la répartition par pays au sein de l’UE restent stables par rapport au trimestre précédent de même que le stock de plus-values latentes sur ces titres (70 milliards d’euros en décembre 2015). On note toutefois sur l’ensemble de l’année une augmentation de la valeur de réalisation des placements souverains des pays dits périphériques de la zone euro, principalement causée par les titres italiens (+2,4% sur le dernier trimestre) dont les plus-values latentes ont augmenté de 8,3% au quatrième trimestre 2015 (+7,5% pour l’ensemble des pays dits périphériques). En 2015, le poids des titres souverains français dans le stock de PVL sur l’ensemble des placements obligataires souverains diminue légèrement (63% contre 66% en janvier). Enfin, au quatrième trimestre 2015, l’exposition des 12 principaux assureurs vie au secteur bancaire continue de baisser de -5,2 milliards d’euros, alors même que le montant des titres mis en pension par les 12 principaux assureurs atteint un niveau record à 57,1 milliards (soir +6%) et que les dépôts bancaires augmentent de 23% (7,5 milliards d’euros).
    Keywords: assurance-vie, rachats, patrimoine.
    JEL: G22
    Date: 2016
  6. By: Schweizer, Nikolaus; Szech, Nora
    Abstract: Information about the future may be instrumentally useful, yet scary. For example, many patients shy away from precise genetic tests about their dispositions for severe diseases. They are afraid that a bad test result could render them desperate due to anticipatory feelings. We show that partially revealing tests are typically optimal when anticipatory utility interacts with an instrumental need for information. The same result emerges when patients rely on probability weighting. Optimal tests provide only two signals, which renders them easily implementable. While the good signal is typically precise, the bad one remains coarse. This way, patients have a substantial chance to learn that they are free of the genetic risk in question. Yet even if the test outcome is bad, they do not end in a situation of no hope.
    Keywords: Test Design,Revelation of Information,Design of Beliefs,Medical Tests,Anticipatory Utility,Huntington's Disease
    JEL: D81 D82
    Date: 2016
  7. By: Perri, Fabrizio (Federal Reserve Bank of Minneapolis); Krueger, Dirk (University of Pennsylvania); Mitman, Kurt (IIES)
    Abstract: The goal of this chapter is to study how, and by how much, household income, wealth, and preference heterogeneity amplify and propagate a macroeconomic shock. We focus on the U.S. Great Recession of 2007-2009 and proceed in two steps. First, using data from the Panel Study of Income Dynamics, we document the patterns of household income, consumption and wealth inequality before and during the Great Recession. We then investigate how households in different segments of the wealth distribution were affected by income declines, and how they changed their expenditures differentially during the aggregate downturn. Motivated by this evidence, we study several variants of a standard heterogeneous household model with aggregate shocks and an endogenous cross-sectional wealth distribution. Our key finding is that wealth inequality can significantly amplify the impact of an aggregate shock, and it does so if the distribution features a sufficiently large fraction of households with very little net worth that sharply increase their saving (i.e. they are not hand-to mouth) as the recession hits. We document that both these features are observed in the PSID. We also investigate the role that social insurance policies, such as unemployment insurance, play in shaping the cross-sectional income and wealth distribution, and through it, the dynamics of business cycles.
    Keywords: Recessions; Wealth Inequality; Social Insurance
    JEL: E21 E32 J65
    Date: 2016–06–01
  8. By: Boyd Gilman; Sheila Hoag; Lorenzo Moreno; Greg Peterson; Linda Barterian; Laura Blue; Kristin Geonnotti; Tricia Higgins; Mynti Hossain; Lauren Hula; Rosalind Keith; Jennifer Lyons; Brenda Natzke; Brenna Rabel; Rumin Sarwar; Rachel Shapiro; Cara Stephanczuk; Victoria Peebles; KeriAnn Wells; Joseph Zickafoose
    Keywords: Primary Care Redesign, Implementation Evaluation, Impact Evaluation, Delivery Systems Innovation, Clinician Behavior, Workforce Development, Medicare, Medicaid
    JEL: I

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