nep-ias New Economics Papers
on Insurance Economics
Issue of 2019‒01‒28
nine papers chosen by
Soumitra K. Mallick
Indian Institute of Social Welfare and Business Management

  1. An Apple a Day? Adult Food Stamp Eligibility and Health Care Utilization among Immigrants By Chloe N. East; Andrew I. Friedson
  2. Active Choice, Implicit Defaults, and the Incentive to Choose By John Beshears; James J. Choi; David Laibson; Brigitte C. Madrian
  3. What Hides behind the German Labor Market Miracle? Unemployment Insurance Reforms and Labor Market Dynamics By Hartung, Benjamin; Jung, Philip; Kuhn, Moritz
  4. Financial Dollarization in Emerging Markets: An Insurance Arrangement By Husnu C. Dalgic
  5. Ain’t got no, I got life: Childhood exposure to WW2 and financial risk taking in adult life. By Bellucci, Davide; Fuochi, Giulia; Conzo, Pierluigi
  6. Wage Insurance, Part-Time Unemployment Insurance and Short-Time Work in the XXI Century By Pierre Cahuc
  7. Les pratiques d'activité réduite et leurs impacts sur les trajectoires professionnelles : une revue de la littérature By Nathalie Havet; Xavier Joutard; Alexis Pénot
  8. La rentabilité technique des organismes d’assurance-vie et mixtes établis en France By Frédéric Ahado; Liliana Arias
  9. Marginal jobs and job surplus: a test of the efficiency of separations By Simon Jäger; Benjamin Schoefer; Josef Zweimüller

  1. By: Chloe N. East (University of Colorado, Denver); Andrew I. Friedson (University of Colorado, Denver)
    Abstract: In this study, we document the effect of food stamp access on adult health care utilization. While the Food Stamp Program provides one of the largest safety nets in the United States today, the universal nature of the program across geographic areas and over time limits the potential for quasi-experimental analysis. To circumvent this, we use variation in documented immigrants’ eligibility for food stamps across states and over time due to welfare reform in 1996. Our estimates indicate that access to food stamps reduced physician visits. Additionally, we find that for single women, food stamps increased the affordability of specialty health care. These findings have important implications for cost-benefit analyses of the Food Stamp Program, as reductions in health care utilization because of food stamps may offset some of the program’s impact on the overall government budget owing to the existence of government-provided health insurance programs such as Medicaid.
    Keywords: Food stamps, immigrants, health cares
    JEL: H51 H53 H75 I11 I18 Q18
    Date: 2018–12
  2. By: John Beshears; James J. Choi; David Laibson; Brigitte C. Madrian
    Abstract: Home-delivered prescriptions have no delivery charge and lower copayments than prescriptions picked up at a pharmacy. Nevertheless, when home delivery is offered on an opt-in basis, the take-up rate is only 6%. We study a program that makes active choice of either home delivery or pharmacy pick-up a requirement for insurance eligibility. The program introduces an implicit default for those who don’t make an active choice: pharmacy pick-up without insurance subsidies. Under this program, 42% of eligible employees actively choose home delivery, 39% actively choose pharmacy pick-up, and 19% make no active choice and are assigned the implicit default. Individuals who financially benefit most from home delivery are more likely to choose it. Those who benefit least from insurance subsidies are more likely to make no active choice and lose those subsidies. The implicit default incentivizes people to make an active choice, thereby playing a key role in choice architecture.
    JEL: D03 D04 D91 I13
    Date: 2019–01
  3. By: Hartung, Benjamin (University of Bonn); Jung, Philip (TU Dortmund); Kuhn, Moritz (University of Bonn)
    Abstract: A key question in labor market research is how the unemployment insurance system affects unemployment rates and labor market dynamics. We revisit this old question studying the German Hartz reforms. On average, lower separation rates explain 76% of declining unemployment after the reform, a fact unexplained by existing research focusing on job finding rates. The reduction in separation rates is heterogeneous, with long-term employed, high-wage workers being most affected. We causally link our empirical findings to the reduction in long-term unemployment benefits using a heterogeneous-agent labor market search model. Absent the reform, unemployment rates would be 50% higher today.
    Keywords: unemployment insurance, labor market flows, endogenous separations
    JEL: E24 J63 J64
    Date: 2018–11
  4. By: Husnu C. Dalgic
    Abstract: Households in emerging markets hold significant amounts of dollar deposits while firms have significant amounts of dollar debt. Motivated by the perceived dangers, policymakers often develop regulations to limit dollarization. In this paper, I draw attention to an important benefit of dollarization, which should be taken into account when crafting regulations. I argue that dollarization repre- sents an insurance arrangement in which the entrepreneurs that own firms pro- vide income insurance to households. Emerging market exchange rates tend to depreciate in a recession so that dollar deposits in effect provide households with income insurance. With their preference for holding deposits denominated in dol- lars, households effectively starve local financial markets of local currency, which raises local interest rates. By raising local currency interest rates, they cause entrepreneurs to borrow in dollars. Consistent with my argument, countries in which the exchange depreciates in a recession have a higher level of deposit and credit dollarization. In those countries, I verify that the premium of the local interest rate over the dollar interest rate is higher. This premium is the price paid by households for insurance.
    Keywords: Emerging Markets. Financial Dollarization. Corporate Dollar Debt.
    JEL: E32 E43 E44 F32 F41 F43
    Date: 2018–11
  5. By: Bellucci, Davide; Fuochi, Giulia; Conzo, Pierluigi (University of Turin)
    Abstract: Childhood adverse experiences might have long-lasting effects on decisions under uncertainty in adult life. Merging the European Survey on Health, Ageing and Retirement with data on conflict events happened during Second World War, and relying on region-by-cohort variation in war exposure, we show that warfare exposure during childhood is associated with lower financial risk taking in later life. Individuals who experienced war episodes as children hold less – and are less likely to hold – stocks, but are more likely to hold life insurance, compared to non-exposed individuals. Effects are robust to the inclusion of potential mediating factors, and are tested for nonlinearity and heterogeneity. In addition, war-exposed respondents show higher resilience to financial shocks, as they react less dramatically to stock market losses. By shaping cognitive schemata, the experience of war might have increased the perception of uncertainty and uncontrollability of the environment, leading to an overestimation of risks and of the likelihood of negative events.
    Date: 2019–01
  6. By: Pierre Cahuc (Département d'économie)
    Abstract: At the start of the XXI century, characterized by the rise of new forms of employment and of skills requirements, many countries need to adapt their labor market institutions to accompany technological changes and globalization. In this context, unemployment insurance is an essential tool to foster and smooth career paths. Its core components comprise unemployment benefits paid to full-time unemployed workers, monitoring, and counseling. But it is clear that they are not sufficient to cover all risks properly. To deal with this issue, part-time unemployment insurance, short-time work and wage insurance have been tried, at different scales, in several countries over the last decades. This paper surveys the evaluations of these schemes and draws lessons from their results for future research and for labor market institutions.
    Keywords: Part-time unemployment insurance; Wage insurance; Short-time work
    JEL: H5 J6
    Date: 2018–12
  7. By: Nathalie Havet (Observatoire français des conjonctures économiques (OFCE)); Xavier Joutard (Observatoire français des conjonctures économiques); Alexis Pénot (École normale supérieure - Lyon (ENS Lyon))
    Abstract: Le dispositif des activités réduites vise à atténuer les effets désincitatifs du système d’allocation chômage en permettant aux demandeurs d’emploi de combiner activité rémunérée et recherche d’emploi tout en cumulant, au moins partiellement, la rémunération de son activité et ses allocations chômage. Notre revue de la littérature théorique et empirique cherche à savoir si ce dispositif, avec des incitations nécessairement limitées à l’exercice d’une activité temporaire ou à temps partiel, peut favoriser une insertion durable sur le marché du travail. Elle montre que les effets théoriques attendus sur les trajectoires professionnelles des demandeurs d’emploi et sur la qualité des emplois potentiellement retrouvés sont ambigus et méritent d’être tranchés empiriquement. Les études empiriques nationales et internationales mettent alors en évidence qu’il est nécessaire de distinguer les effets à court terme des effets à long terme et qu’il existe une forte hétérogénéité des impacts entre demandeurs d’emploi. Néanmoins, en France, l'activité réduite semble globalement un accélérateur de l'accès à l'emploi durable mais avec des effets relativement modestes. En outre, elle ne semble pas améliorer ni dégrader la qualité de l'emploi retrouvé.
    Keywords: Unemployment duration; Unemployment insurance; Segmented labor markets; Temporary jobs; Job transitions
    JEL: J42 J64 J65
    Date: 2018–11
  8. By: Frédéric Ahado; Liliana Arias
    Abstract: Le secteur de l’assurance-vie a collecté 137 milliards d’euros de primes en 2017 et a dégagé 6 milliards d’euros de résultat technique. Les contrats d’épargne en euros continuent à représenter la plus grande partie du chiffre d’affaires (54% du total) et du résultat technique (55%). Pour autant, compte tenu de la conjoncture actuelle de taux d’intérêt, les assureurs favorisent la souscription d’unités de compte car elles génèrent une exigence réglementaire en fonds propres significativement inférieure à celle des engagements en euros. En effet, le risque de perte en capital sur les unités de compte est supporté par les assurés. L’assurance décès (contrats d’assurance prévoyance, notamment emprunteur) ne représente qu’une petite partie du chiffre d’affaires des assureurs vie (9%), mais génère 30% du résultat technique du secteur. L’assurance décès affiche ainsi un solde de souscription (net de charges d’acquisition et de gestion) nettement supérieur à celui des autres lignes d’activité. De plus, les bénéfices techniques et financiers générés par l’assurance décès sont essentiellement redistribués à d’autres catégories d’engagements via le mécanisme de participation aux résultats. Les frais d’acquisition et d’administration engagés en 2017 sont les plus faibles sur les contrats d’assurance-vie collective (principalement d’assurance retraite) pour lesquelles ils représentent 0,3% des provisions d’assurance-vie. A l’exception de l’assurance en cas de décès, les frais s’élèvent en 2017 de 0,5% à 0,9% des encours environ pour les autres catégories.
    Keywords: assurance-vie, primes, rentabilité, solde de souscription, solde financier, provisions, prestations, frais, provision pour participation aux bénéfices, résultat technique, transferts
    JEL: G22
    Date: 2019
  9. By: Simon Jäger; Benjamin Schoefer; Josef Zweimüller
    Abstract: We present a sharp test for the efficiency of job separations. First, we document a dramatic increase in the separation rate – 11.2ppt (28%) over five years – in response to a quasi-experimental extension of UI benefit duration for older workers. Second, after the abolition of the policy, the "job survivors" in the formerly treated group exhibit exactly the same separation behavior as the control group. Juxtaposed, these facts reject the "Coasean" prediction of efficient separations, whereby the UI extensions should have extracted marginal (low-surplus) jobs and thereby rendered the remaining (high-surplus) jobs more resilient after its abolition. Third, we show that a formal model of predicted efficient separations implies a piece-wise linear function of the actual control group separations beyond the missing mass of marginal matches. A structural estimation reveals point estimates of the share of efficient separations below 4%, with confidence intervals rejecting shares above 13%. Fourth, to characterize the marginal jobs in the data, we extend complier analysis to difference-in-difference settings such as ours. The UI-indiced separators stemmed from declining firms, blue-collar jobs, with a high share of sick older workers, and firms more likely to have works councils – while their wages were similar to program survivors. The evidence is consistent with a "non-Coasean" framework building on wage frictions preventing efficient bargaining, and with formal or informal institutional constraints on selective separations.
    Keywords: Efficient separations, unemployment insurance, job surplus, wage bargaining, complier analysis
    JEL: J63 J65 J30 C52
    Date: 2018–12

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