nep-ias New Economics Papers
on Insurance Economics
Issue of 2017‒11‒26
eleven papers chosen by
Soumitra K. Mallick
Indian Institute of Social Welfare and Business Management

  1. The Effect of the Affordable Care Act on the Labor Supply, Savings, and Social Security of Older Americans By Eric French
  2. Healthcare service status and forecast of insurance companies By Sungwoo Park; Minji Kim; Euitay Jung
  3. Employment Patterns Before Applying for Disability Insurance By Kara Contreary; Todd Honeycutt; Michelle Stegman Bailey; Joseph Mastrianni
  4. Unemployment insurance, job mobility and formalization: an analysis of the Brazilian case By Danilo P. Souza
  5. Complementarities between social protection and health sector policies: Evidence from the Productive Safety Net Program in Ethiopia By Hirvonen, Kalle; Bossuyt, Anne; Pigois, Remy
  6. A ‘twin peaks’ vision for Europe By Dirk Schoenmaker; Nicolas Véron
  7. Long-Run Consequences of Health Insurance Promotion: Evidence from a Field Experiment in Ghana By Asuming, Patrick Opoku; Kim, Hyuncheol Bryant; Sim, Armand
  8. Regressive Subsidy to EHI and Entrepreneurial Talent Allocation By Anne Villamil; Zhigang Feng
  9. Children, Time Allocation and Consumption Insurance By Richard Blundell; Luigi Pistaferri; Itay Saporta-Eksten
  10. Shareholding Networks for Care in Rural Thailand: Experiences of Older Persons and Their Family Members By Supaporn Voraroon
  11. On the Design of a European Unemployment Insurance Mechanism By Ramon Marimon

  1. By: Eric French (University College London)
    Abstract: This paper assesses the effect of the Affordable Care Act (ACA) on the labor supply of Americans ages 50 and older. Using data from the Health and Retirement Study and the Medical Expenditure Panel Survey, we estimate a dynamic programming model of retirement that accounts for both saving and uncertain medical expenses. Importantly, we model the two key channels by which health insurance rates are predicted to change: the Medicaid expansion and the subsidized private exchanges.
    Date: 2017
  2. By: Sungwoo Park (Inje University); Minji Kim (Inje University); Euitay Jung (Inje University)
    Abstract: Currently, Korea is rapidly aging and the perception of health is changing from treatment focused to management and prevention focused. As a result, along with the popularization of smart-phone devices, health care and prevention-oriented applications are launched and various smart healthcare products are being developed as well.In addition, interest in healthcare services is increasing in the insurance industry in recent years. According to the researcher from the Insurance Research Institute, success stories of healthcare service through convergence of diverse industries such as medical, tourism, and IT in USA, Japan, China and Australia are appearing and the healthcare service market is getting popular as the new growth engine of the insurance industry. Foreign insurance companies such as Lina Insurance, AIA Life Insurance, Allianz Life Insurance and domestic companies such as Hanwha Life Insurance, Kyobo Life Insurance, Hyundai Insurance, etc are providing healthcare services using new technology such as ICT. Lina Insurance that is overseas insurance company has a sleep health management program and hospital reservation program through real-time interpretation service during overseas travel for the employees. AIA Life Insurance has a pace counting function for internal employees, and Allianz Life Insurance has a 1: 1 management service program with counselors. Domestic insurers such as Hanwha Life Insurance, Kyobo Life Insurance, and Hyundai Insurance provide health consultation services and appointment reservations to certain insurance members.However, there is a need for the Korean government to revise the existing medical laws that control the medical practices of non - medical institutions such as insurance companies and provide basis on healthcare service to activate the concerning market.
    Keywords: healthcare services, insurance industry, healthcare
    Date: 2017–10
  3. By: Kara Contreary; Todd Honeycutt; Michelle Stegman Bailey; Joseph Mastrianni
    Abstract: The authors identify two types of DI applicants based on preapplication employment patterns.
    Keywords: Employment, Social Security Disability Insurance, Early Intervention, Worker Retention
    JEL: I J
  4. By: Danilo P. Souza
    Abstract: In order to assess the recent rise in the fiscal expenses due to unemployment insurance (UI) in Brazil, we build a simple matching model that takes into account the growing formalization rate, job mobility and other institutional characteristics of the country’s labor market. Our results indicate that around 77% of the positive variation in the UI expenses is due to an increase in the formalization rate, while 22% is due to a rise in the job mobility between 2000-2014.
    Keywords: labor market; job mobility; informality; unemployment insurance
    JEL: J08 J65
    Date: 2017–10–30
  5. By: Hirvonen, Kalle; Bossuyt, Anne; Pigois, Remy
    Abstract: Social protection policies typically involve multiple sectors, ranging from food security to health care. Despite this, limited research is directed toward understanding how different social protection programs complement each other. In this study, we explore complementarities between three major national social protection programs in rural Ethiopia: the Productive Safety Net Programme (PSNP), the Health Fee Waiver (HFW) system, and the Community Based Health Insurance (CBHI) in the Ethiopian highlands (Amhara, Oromia, SNNP, and Tigray regions).
    Keywords: food security; health policies; social policies; health services; health insurance; rural communities; low income groups
    Date: 2017
  6. By: Dirk Schoenmaker; Nicolas Véron
    Abstract: The European Union’s financial supervisory architecture is based on a sectoral model with separate authorities for banking, insurance and securities and markets. New developments in the EU financial sector make this sectoral structure increasingly out of date - Brexit creates a need for strong EU-level wholesale market and conduct-of-business supervision to build an integrated capital market for the EU27; Mis-selling of bank bonds – that can be bailed in – to retail consumers has highlighted the need for a strong conduct-of-business supervisor for banking and other retail financial services, separate from prudential supervision to ensure a strong focus on the interests of consumers; Financial conglomerates, combining banking and insurance, make up about a third of Europe’s banking and insurance sector. Joined-up supervision would strengthen the prudential supervision of these conglomerates. To deal with these challenges, the EU should commit to a twin peaks model as a long-term vision for supervision. The first peak would be prudential supervision focusing on the health and soundness of financial firms. As these financial firms have become increasingly interwoven, the vision of integrated cross-sector prudential supervision is increasingly compelling, even though legal obstacles imply it cannot be implemented at the European level in the near term. The second peak would be a strong markets and conduct of business supervisor. This supervisor would solely focus on the proper functioning of markets and fair treatment of consumers. This twin peaks model should guide Europe’s efforts to deal with current challenges.
    Date: 2017–11
  7. By: Asuming, Patrick Opoku (University of Ghana); Kim, Hyuncheol Bryant (Cornell University); Sim, Armand (Cornell University)
    Abstract: We study the long-run impacts of health insurance promotion in Northern Ghana. We randomly provide three overlapping interventions to promote enrollment: subsidy, information campaign, and convenient sign-up option, with follow-up surveys seven months and three years after the initial intervention. Our interventions, especially the subsidy, promote enrollment and healthcare service utilization in the short and long runs. We also find short-run health status improvements, which disappear in the long run. We find suggestive evidence on decreased investment in disease prevention and selection that may help explain this pattern of health status changes.
    Keywords: health insurance, sustainability, moral hazard, selection, screening effect, randomized experiments
    JEL: I1 O12
    Date: 2017–10
  8. By: Anne Villamil (University of Iowa); Zhigang Feng (University of Nebraska)
    Abstract: Abstract Americans who obtain health insurance coverage through employment do not currently pay income or payroll taxes on this benefit. Tax-deductible employer-based health insurance (EHI) is regressive, and we show that this tax policy can help correct misallocation between self-employment and firm employment. Agents face idiosyncratic health risk and have heterogeneous ability as workers or entrepreneurs, and choose their occupation. Linking employment and health insurance creates a wedge between the marginal cost and benefit of EHI and employment at a firm. In equilibrium, some highly skilled individuals with adverse health shocks leave entrepreneurship while individuals with intermediate skills but favorable health shocks opt to manage firms. In the presence of imperfect information on private agent's health risk and managerial ability, and in the absence of perfectly discriminating taxes, a regressive tax subsidy for entrepreneurs to purchase health insurance helps correct distortions associated with non-contractible heterogeneity in managerial talent and health shocks. The subsidy makes entrepreneurship a more (less) attractive option for the highly (medium) skilled unhealthy (healthy) agents as such a policy increases (reduces) net-tax entrepreneurial income. Consequently, this tax policy provides an additional incentive (disincentive) for the first (second) type to be an entrepreneur, hence improving talent allocation. For a dynamic equilibrium model calibrated to the US economy, we find that the welfare gain from improved talent allocation outweighs the loss due to reduced risk sharing associated with the regressive subsidy.
    Date: 2017
  9. By: Richard Blundell; Luigi Pistaferri; Itay Saporta-Eksten
    Abstract: We consider the life cycle choices of a household that in each period decides how much to consume and how to allocate spouses' time to work, leisure, and childcare. In an environment with uncertainty, the allocation of goods and time over the life cycle also serves the purpose of smoothing marginal utility in response to shocks. We combine data on consumption, spouses' wages, hours of work, and time spent with children to estimate the sensitivity of consumption and time allocation to transitory and permanent wage shocks. These structural parameters describe the ability of household to self-insure in response to shocks. We find that behavioral responses to wage shocks depend on the presence of young children. We also find that labor supply cross-responses depend on three counteracting forces: complementarity of leisure time, substitutability of time in the production of child services, and added worker effects.
    JEL: J13 J22
    Date: 2017–11
  10. By: Supaporn Voraroon (PhD.Student nursing at Mid Sweden University)
    Abstract: Most members of the older population in Thailand live in rural areas whiletheir children live in cities. With the joint family system separated, elderlyThai persons often have to care for themselves, and opportunities for them toget involved in community care remain limited. In response, the aim of thisstudy was to describe older persons? and their family members? experienceswith shareholding networks for the care of older people in rural Thailand.Paired interviews with five older persons and five of their family memberswere conducted, and collected data were subjected to content analysis, whichyielded results organized around two themes: older persons? outsider statusand disregard for older persons? individuality. Whereas the theme of outsiderstatus describes shortcomings in health care encounters, the theme of disregardfor individuality describes the lack of engagement of authorities and caregiversin older persons? care. In that sense, the concept of participationemerged as a framework for understanding interviewees? experiences. Givenfindings from local authorities, older individuals and their family membersshould engage in dialogue in order to support healthcare based on shared understanding.
    Keywords: Community Healthcare, Content Analysis, Older Persons, Participation
    JEL: I19 I18 I10
    Date: 2017–10
  11. By: Ramon Marimon (European University Institute and UPF - Barcelona GSE)
    Abstract: European labour markets are subject to idiosyncratic shocks (and idiosyncratic responses to common shocks), resulting in countercyclical unemployment expenses difficult to accommodate under existing, fiscal compact, budget rules. These and other factors (solidarity, labour market integration) provide a rationale for European unemployment risk sharing. We study the potential benefits, and problems, of creating a European Unemployment Insurance Mechanism (EUIM). Following Krusell et al. (2011 and 2015), we use a dynamic general equilibrium model with search frictions to analyze workers' flows (employment, unemployment and inactivity) and their cyclical properties, to assess the potential benefits of a EUIM under alternative common (and jointly financed) unemployment insurance policies. Our analysis shows that country-specific structural differences play a determinant role in explaining labour market differences, leaving limited space for welfare improvements with an EUIM. The framework would also allow to study the optimal design of an EUIM, subject to redistributional and incentive (moral hazard and free riding) constraints.
    Date: 2017

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