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on Insurance Economics |
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Issue of 2020‒05‒11
fifteen papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Nishimura, Y.;; Oikawa, M.; |
| Abstract: | This study analyzes the relation between the labor force participation of caregivers and the provision of informal in-home elderly care. In Japan, the national government both regulates the market entry of nursing home suppliers and intervenes in the supply side of the eldercare market. Using exogenous variations in this supply side intervention, our analysis finds that the Japanese policy of expanding nursing homes has increased the labor force participation of female workers with low opportunity costs in the labor market while simultaneously reducing their provision of informal care. As the per capita expense of nursing home care is higher than the wage income of most non-regular female workers who tend to provide the bulk of informal in-home care, one may reasonably conclude that the capacity of public nursing homes in Japan has expanded excessively, putting unnecessary pressure both on the Japanese budget and the personal provision of eldercare services. |
| Keywords: | long-term care insurance system; labor supply; medical expenditure; regulation; |
| JEL: | H51 I18 J14 J18 J22 |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:20/02&r=all |
| By: | Theodore F. Figinski; Erin Troland |
| Abstract: | The United States government spends billions on public health insurance and has funded a number of programs to build health care facilities. However, the government runs these two types of programs separately: in different places, at different times, and for different populations. We explore whether access to both health insurance and hospitals can improve health outcomes and access to health care. We analyze a coal mining union health insurance program in 1950s Appalachia with and without a complementary hospital construction program. Our results show that the union insurance alone increased hospital births and reduced infant mortality. Once the union hospitals opened, however, the insurance and the hospitals together substantially increased the net amount of hospital beds and health care employees, with limited crowd-out of existing private hospitals. Our results suggest that hospitals can complement health insurance in underserved areas. |
| Keywords: | Public economics; Health care; Economic history; Urban, Rural, & Regional Economics; Health economics |
| JEL: | H51 I13 I18 N32 R58 |
| Date: | 2020–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2020-33&r=all |
| By: | (Дмитриев, Михаил) (The Russian Presidential Academy of National Economy and Public Administration); (Калмыков, Николай) (The Russian Presidential Academy of National Economy and Public Administration); (Ларина, Светлана) (The Russian Presidential Academy of National Economy and Public Administration); (Крапиль, Валерий) (The Russian Presidential Academy of National Economy and Public Administration) |
| Abstract: | Health insurance, retirement insurance, long-term life insurance, social services, aging population. The work is devoted to the problems of developing social insurance taking into account long-term demographic and technological challenges. The aim of the study presented in the work is to develop new financial and economic mechanisms to increase the financial sustainability of the social insurance system and to increase the availability of advanced healthcare and social care technologies. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:032022&r=all |
| By: | Jonathan Gruber; Benjamin R. Handel; Samuel H. Kina; Jonathan T. Kolstad |
| Abstract: | In numerous high stakes markets skilled experts play a key role in facilitating consumer choice of complex products. New artificial intelligence (AI) technologies are increasingly being used to augment expert decisions. We study the role of technology and expertise in the market for health insurance, where consumer choices are widely known to be sub-optimal. Our analysis leverages the large-scale implementation of an AI-based decision support tool in a private Medicare exchange where consumers are randomized to skilled agents over time. We find that, prior to AI-based technology, skilled experts in this market exhibit the same type of inconsistent behavior found in previous studies of individual choices, costing consumers $1260 on average. The addition of AI-based decision support improves outcomes by $278 on average and substantially reduces heterogeneity in broker performance. Experts efficiently synthesize private information, incorporating AI-based recommendations along dimensions that are well suited to AI (e.g. total expected patient costs), but overruling AI-based recommendations along dimensions for which humans are better suited (e.g. specifics of doctor networks). As a result, switching plans, an ex-post measure of plan satisfaction, is meaningfully lower for agents making AI-based recommendations. While AI is a complement to skill on average, we find that it is a substitute across the skill distribution; lower quality agents provide better recommendations with AI than the top agents did without it. Overall productivity rises, with the introduction of decision support associated with a 21% reduction in call time for enrollment. |
| JEL: | I13 J24 L15 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27038&r=all |
| By: | Lucio Fernandez-Arjona |
| Abstract: | Insurance companies make extensive use of Monte Carlo simulations in their capital and solvency models. To overcome the computational problems associated with Monte Carlo simulations, most large life insurance companies use proxy models such as replicating portfolios. In this paper, we present an example based on a variable annuity guarantee, showing the main challenges faced by practitioners in the construction of replicating portfolios: the feature engineering step and subsequent basis function selection problem. We describe how neural networks can be used as a proxy model and how to apply risk-neutral pricing on a neural network to integrate such a model into a market risk framework. The proposed model naturally solves the feature engineering and feature selection problems of replicating portfolios. |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2005.02318&r=all |
| By: | Marco Migueis |
| Abstract: | Basel's new standardized approach (SA) for operational risk capital may allow for regulatory arbitrage through the use of insurance. Under the SA, banks will have incentive to insure recurring losses, which can meaningfully reduce capital requirements even as it does not meaningfully decrease tail operational loss exposure. Several alternatives to deal with this regulatory arbitrage strategy are discussed. |
| Date: | 2020–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfn:2020-03-30&r=all |
| By: | Gorlin, Yury (Горлин, Юрий) (The Russian Presidential Academy of National Economy and Public Administration); Lyashok, Viktor (Ляшок, Виктор) (The Russian Presidential Academy of National Economy and Public Administration); Salmina, Alla (Салмина, Алла) (The Russian Presidential Academy of National Economy and Public Administration); Fedorov, Vitaly (Федоров, Виталий) (The Russian Presidential Academy of National Economy and Public Administration) |
| Abstract: | The paper sets out the main provisions of the developed by the authors of the system of indicators of the level of pension provision in relation to the conditions of the Russian system of pension insurance. The proposed indicators evaluate the fulfillment of the following three functions of insurance pensions: smoothing out changes in income during and after retirement, protecting pensioners from poverty, and ensuring a balance between the level of pensions and wages. To evaluate these functions of insurance pensions, two types of indicators have been developed that differ in methodology and informational basis for calculation: empirical and theoretical. |
| Date: | 2020–03 |
| URL: | http://d.repec.org/n?u=RePEc:rnp:wpaper:032011&r=all |
| By: | Joseph E. Stiglitz; Jungyoll Yun; Andrew Kosenko |
| Abstract: | We study insurance markets with nonexclusive contracts, introducing bilateral endogenous information disclosure about insurance sales and purchases by firms and consumers. We show that a competitive equilibrium exists under remarkably mild conditions, and characterize the unique equilibrium outcome. With two types of consumers the outcome consists of a pooling contract which maximizes the well-being of the low risk type (along the zero profit pooling line) plus a supplemental (undisclosed and nonexclusive) contract that brings the high risk type to full insurance (at his own odds). We show that this outcome is extremely robust and constrained Pareto efficient. Consumer disclosure and asymmetric equilibrium information flows are critical in supporting the equilibrium. |
| JEL: | D43 D82 D86 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27041&r=all |
| By: | Erica M. Valdovinos; Matthew J. Niedzwiecki; Joanna Guo; Renee Y. Hsia |
| Abstract: | Uninsured patients have decreased access to care, lower rates of percutaneous coronary intervention (PCI), and worse outcomes after acute myocardial infarction (AMI). |
| Keywords: | Medicaid, acute Myocardial Infarction |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:4988c9f71ed041e7939158bd50a2d71a&r=all |
| By: | Asger Lau Andersen (CEBI, Department of Economics, University of Copenhagen); Amalie Sofie Jensen (Department of Economics, Princeton University); Niels Johannesen (CEBI, Department of Economics, University of Copenhagen); Claus Thustrup Kreiner (CEBI, Department of Economics, University of Copenhagen); S�ren Leth-Petersen (CEBI, Department of Economics, University of Copenhagen); Adam Sheridan (CEBI, Department of Economics, University of Copenhagen) |
| Abstract: | How do households respond to job loss, and which self-insurance channels are most important? By linking customer data from the largest bank in Denmark with information from government administrative registers, we quantify a broad range of responses to job loss in a unified empirical framework. Two response margins stand out: during the first 24 months after job loss, households reduce spending by 30% of the income loss while reduced saving in liquid assets accounts for 50%. Other response margins highlighted in the literature - spousal labor supply, private transfers, home equity extraction, mortgage refinancing, and consumer credit - are less important. |
| Keywords: | Household economics, unemployment, self-insurance, transaction data |
| JEL: | D14 J65 |
| Date: | 2020–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:kud:kucebi:2012&r=all |
| By: | Lisa B. Kahn; Fabian Lange; David G. Wiczer |
| Abstract: | We use job vacancy data collected in real time by Burning Glass Technologies, as well as initial unemployment insurance (UI) claims data to study the impact of COVID-19 on the labor market. Our data allow us to track postings at disaggregated geography and by detailed occupation and industry. We find that job vacancies collapsed in the second half of March and are now 30% lower than their level at the beginning of the year. To a first approximation, this collapse was broad based, hitting all U.S. states, regardless of the intensity of the initial virus spread or timing of stay-at-home policies. UI claims also largely match these patterns. Nearly all industries and occupations saw contraction in postings and spikes in UI claims, regardless of whether they are deemed essential and whether they have work-from-home capability. The only major exceptions are in essential retail and nursing, the “front line” jobs most in-demand during the current crisis. |
| JEL: | J23 J6 J63 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27061&r=all |
| By: | Victor Ortego-Marti (Department of Economics, University of California Riverside) |
| Abstract: | This paper builds a model of endogenous TFP with search and matching frictions in the labor market with two features: production units are subject to idiosynchratic shocks and workers suffer skill loss during unemployment. I show that aggregating firms' micro-production decision leads to an aggregate production that is Cobb-Douglas in labor and capital. The endogenous TFP depends on two equilibrium characteristics of the labor market: the productivity of matches formed and active, and the aggregate skill distribution. In particular, the job destruction decision and the job finding rate are sufficient statistics that uniquely determine TFP. The labor market affects TFP through two channels. First, an increase in the reservation productivity raises the average match productivity and TFP. Second, the job finding rate and the job destruction decision shape the skill distribution, as it determines how long workers remain unemployed and the amount of skill loss. The paper then studies the effect of labor market policies on TFP. In contrast with previous studies, the effect of unemployment insurance on TFP depends on the relative size of the two channels. More generous unemployment insurance programs improve TFP only if the effect on the average productivity is larger than the compositional effect through to the skill channel. |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:ucr:wpaper:202007&r=all |
| By: | Stefano DellaVigna; Jörg Heining; Johannes F. Schmieder; Simon Trenkle |
| Abstract: | The job finding rate of Unemployment Insurance (UI) recipients declines in the initial months of unemployment and then exhibits a spike at the benefit exhaustion point. A range of theoretical explanations have been proposed, but those are hard to disentangle using data on job finding alone. To better understand the underlying mechanisms, we conducted a large text-message-based survey of unemployed workers in Germany. We surveyed 6,800 UI recipients twice a week for 4 months about their job search effort. The panel structure allows us to observe how search effort evolves within individual over the unemployment spell. We provide three key facts: 1) search effort is flat early on in the UI spell, 2) search effort exhibits an increase up to UI exhaustion and a decrease thereafter, 3) UI recipients do not appear to time job start dates to coincide with the UI exhaustion point. A model of reference-dependent job search can explain these facts well, while a standard search model with unobserved heterogeneity struggles to explain the second fact. The third fact also leaves little room for a model of storable offers to explain the spike. |
| JEL: | D9 J64 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27037&r=all |
| By: | Peter Eibich; Léontine Goldzahl |
| Abstract: | Population ageing is expected to increase the burden of non-communicable diseases, e.g., cardiovascular diseases and cancer. These diseases are amenable to prevention, such as lifestyle changes (primary prevention) and early detection (secondary prevention), and thus prevention is considered to be one of the keys to maintaining the health of an ageing population. This paper examines the causal impact of retirement on secondary preventive care use. While we focus on breast cancer screening, we also provide evidence for other types of screening such as cervical cancer screening. We use five waves of data from the Eurobarometer surveys conducted between 1996 and 2006, covering 25 different European countries. We address the endogeneity of retirement by using age thresholds for pension eligibility as instrumental variables. We find that retirement reduces secondary preventive care use. This effect is not driven by changes in health or income. Instead, our evidence suggests that generosity of the social health insurance system and women’s beliefs concerning cancer prevention and treatment are important mechanisms. |
| Keywords: | Europe; retirement; health behavior; instrumental variables; preventive care; breast cancer |
| JEL: | I12 I18 J26 C26 |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:20/05&r=all |
| By: | Beblavy, Miroslav |
| Abstract: | This paper briefly analyses the proposal by the European Commission to establish SURE, the ‘European instrument for temporary support to mitigate unemployment risks in an emergency’. The SURE facility would borrow up to €100 billion on the financial markets, lend it to member states to finance short-time work schemes and similar measures, using guarantees from the member states themselves. The analysis makes the point that the scheme should be seen, first and foremost, as a proof of European solidarity to counter hostile propaganda from Russia and China about the EU’s ineffectiveness. It can also have an impact on national policies to deal with the coronavirus and to assist the most damaged and/or fiscally weak member states, but this effect is likely to be limited. Potentially, the most important feature of SURE is that it explicitly refers to itself as the forerunner of a future European Unemployment Insurance scheme. |
| Date: | 2020–04 |
| URL: | http://d.repec.org/n?u=RePEc:eps:cepswp:27036&r=all |