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on Insurance Economics |
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Issue of 2020‒09‒28
nineteen papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Elisabeth Paul; N'koué Emmanuel Sambiéni; Jean-Pierre Wangbe; Fabienne Fecher; Marc Bourgeois |
| Abstract: | Background: In its pursuance of universal health coverage (UHC), the government of Benin is piloting a project ofmandatory social insurance for health entitled “ARCH”.Methods: We analysed budget data and ARCH documents, and conducted four observation missions in Beninbetween March 2018 and January 2020. Results are presented in terms of the three classical objectives of publicexpenditure management.Results: The government of Benin faces important budgeting challenges when it comes to implementing theARCH social insurance project: (i) the fiscal space is quite limited, there is a limited potential for new taxes andthese may not benefit the ARCH funding, hence the need to prioritise fiscal resources without jeopardising otherareas; (ii) the purchasing of health services should be more strategic so as to increase allocative efficiency andequity; (iii) the efficiency of the expenditure process needs to be improved, and more autonomy needs to bedevoted to the operational level, so as to ensure that health facilities are reimbursed in a timely fashion in order tomeet insured people’s health costs, in such a way as to avoid jeopardizing the financial equilibrium of thesefacilities.Conclusion: The important budgeting challenges faced by Benin when it comes to implementing its UHC policyare also faced by many other African countries. It is important to avoid a situation in which the resources dedicatedby the government to the social health insurance system are at the expense of a reduction in the financing ofpreventive and promotional primary healthcare services. |
| Keywords: | Universal health coverage; Health financing; Budgeting; Public expenditure management; Strategic purchasing; Benin |
| Date: | 2020–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/312499&r=all |
| By: | Jie Ma; Kosali I. Simon |
| Abstract: | When women of childbearing age gain health insurance, we expect their birth outcomes to improve, but comparing births that occur before and after policy changes may confound two separate impacts of coverage. For one, health insurance could affect who gives birth, through reduced costs of contraception. Health insurance could also directly improve maternal and child health among those who give birth, through additional prenatal resources. We address this question using the Affordable Care Act young adult provision, comparing birth related outcomes for those aged 24-25 years after the law, to outcomes among older young adults. We show that since the law subsidized contraceptives mainly among higher socioeconomic groups, the composition of mothers shifted towards less advantaged groups. Accounting for this shift, we find evidence of direct improvements in prenatal care and pregnancy-related health (reduced gestational diabetes and hypertension). |
| JEL: | I1 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27728&r=all |
| By: | Keeler, James B.; Saitone, Tina L. |
| Keywords: | Risk and Uncertainty, Agricultural and Food Policy, Agricultural Finance |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea20:304322&r=all |
| By: | Gerlt, Scott; Thompson, Wyatt; Segovia, Michelle |
| Keywords: | Risk and Uncertainty, Agricultural and Food Policy, Institutional and Behavioral Economics |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea20:304387&r=all |
| By: | Ayinde, Opeyemi E.; Miranda, Mario J. |
| Keywords: | Risk and Uncertainty, Institutional and Behavioral Economics, International Development |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea20:304406&r=all |
| By: | Sloggy, Matthew R.; Manning, Dale |
| Keywords: | Resource/Energy Economics and Policy, Agricultural and Food Policy |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea20:304575&r=all |
| By: | Davidson, Kelly A.; Goodrich, Brittney K. |
| Keywords: | Risk and Uncertainty, Agricultural and Food Policy, Institutional and Behavioral Economics |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea20:304550&r=all |
| By: | Asongu, Simplice |
| Abstract: | This article examines the relevance of information and communication technology (ICT) in modulating the effect of education on life insurance and non-life insurance consumption in 48 African countries for the period 2004-2014. Education is measured with primary school, secondary school and tertiary school enrollments. ICT is measured with mobile phone, internet and broadband subscriptions. The empirical evidence is based on generalized method of moments. The following main findings are established. First, from the nexuses between education, ICT and life insurance, there are positive conditional effects from the interaction between: (i) broadband subscriptions and primary school enrollment; (ii) broadband subscriptions and secondary school enrollment and (iii) internet penetration and tertiary school enrollment. Second, from the nexuses between education, ICT and non-life insurance: (i) there is a negative net effect from the interactions between mobile phone penetration and primary education while positive net effects are apparent from the interactions between: mobile phone penetration and secondary school enrollment; secondary school enrollment and broadband subscriptions and; tertiary school enrollment and broadband subscriptions. |
| Keywords: | Education; Technology; Insurance |
| JEL: | I20 I28 I30 O16 O55 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101531&r=all |
| By: | Asongu, Simplice; Odhiambo, Nicholas |
| Abstract: | Purpose –This study investigates the role of financial access in moderating the effect of governance on insurance consumption in 42 Sub-Saharan African countries using data for the period 2004-2014. Design/methodology/approach – Two life insurance indicators are used, notably: life insurance and non-life insurance. Six governance measurements are also used, namely: political stability, “voice & accountability”, government effectiveness, regulation quality, corruption-control and the rule of law. The empirical evidence is based on the Generalised Method of Moments (GMM) and Least Squares Dummy Variable Corrected (LSDVC) estimators. Findings –Estimations from the LSDVC are not significant while the following main findings are established from the GMM. First, financial access promotes life insurance through channels of political stability, “voice & accountability”, government effectiveness, the rule of law and corruption-control. Second, financial access also stimulates non-life insurance via governance mechanisms of political stability, “voice & accountability”, government effectiveness, regulation quality, the rule of law and corruption-control. Originality/value – This research complements the sparse literature on insurance promotion in Africa by engaging the hitherto unexplored role of financial access through governance channels. |
| Keywords: | Insurance; Finance; Governance; Sub-Saharan Africa |
| JEL: | G20 I28 I30 O16 O55 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101520&r=all |
| By: | Martin Boyer (HEC Montréal - HEC Montréal); Philippe de Donder (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Claude Fluet (ULaval - Université Laval [Québec]); Marie-Louise Leroux (UQAM - Université du Québec à Montréal = University of Québec in Montréal); Pierre-Carl Michaud (HEC Montréal - HEC Montréal) |
| Abstract: | This paper conducts a stated-choice experiment where respondents are asked to rate various insurance products aimed to protect against nancial risks associated with long-term care needs. Using exogenous variation in prices from the survey design and individual cost estimates, these stated-choice probabilities are used to predict market equilibrium for long-term care insurance. Our results are twofold. First, information frictions are pervasive. Second, measuring the welfare losses associated with frictions in a framework that also allows for selection, it is found that information frictions reduce equilibrium take-up and lead to large welfare losses while selection plays little role. |
| Keywords: | Long-term care insurance,adverse selection,stated-preference,health,insurance |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-02929780&r=all |
| By: | Asongu, Simplice; Nnanna, Joseph; Acha-Anyi, Paul |
| Abstract: | Purpose –This study investigates the role of ICT in modulating the effect of governance on insurance penetration in 42 sub-Saharan African countries using data for the period 2004-2014. Design/methodology/approach –Two insurance indicators are used in the analysis, namely: life insurance and non-life insurance. The three ICT modulating dynamics employed include: mobile phone penetration, internet penetration and fixed broadband subscriptions. Six governance channels are also considered, namely: political stability, “voice & accountability”, regulation quality, government effectiveness, the rule of law and corruption-control. The empirical evidence is based on generalized method of moments. Findings –The following main findings are established. First, mobile phone penetration does not significantly modulate governance channels to positively affect life insurance while it effectively complements “voice & accountability” to induce a positive net effect on non-life insurance. Second, internet penetration complements: (i) governance dynamics of political stability, government effectiveness and rule of law to induce positive net effects on life insurance: and (ii) corruption-control for an overall positive effect on non-life insurance. Third, the relevance of fixed broadband subscriptions in promoting life insurance is apparent via governance channels of regulation quality, government effectiveness and the rule of law while fixed broadband subscriptions do not induce significant overall net effects on non-life insurance though the conditional effects are overwhelmingly significant. Orginality/value – To the best our knowledge, studies on the relevance of ICT in promoting insurance consumption through governance channels are sparse, especially for a region such as sub-Saharan Africa where insurance penetration is low compared to other regions of the world. |
| Keywords: | Africa; ICT; Governance; Insurance |
| JEL: | G20 I28 I30 L96 O55 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101519&r=all |
| By: | Gao, Xiaoxue Sherry (University of Massachusetts Amherst); Harrison, Glenn (Georgia State University, CEAR); Tchernis, Rusty (Georgia State University) |
| Abstract: | We propose the use of Bayesian estimation of risk preferences of individuals for applications of behavioral welfare economics to evaluate observed choices that involve risk. Bayesian estimation provides more systematic control of the use of informative priors over inferences about risk preferences for each individual in a sample. We demonstrate that these methods make a difference to the rigorous normative evaluation of decisions in a case study of insurance purchases. We also show that hierarchical Bayesian methods can be used to infer welfare reliably and efficiently even with significantly reduced demands on the number of choices that each subject has to make. Finally, we illustrate the natural use of Bayesian methods in the adaptive evaluation of welfare. |
| Keywords: | behavioral welfare economics, Bayesian Analysis, risk preferences, insurance |
| JEL: | D6 C11 D81 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13580&r=all |
| By: | Costas Meghir (Cowles Foundation, Yale University, NBER, IZA, CEPR, and Institute for Fiscal Studies); Ahmed Mushfiq Mobarak (Cowles Foundation, Yale University); Ahmed Corina Mommaerts (University of Wisconsin – Madison); Ahmed Melanie Morten (Stanford University and NBER) |
| Abstract: | Do new migration opportunities for rural households change the nature and extent of informal risk sharing? We experimentally document that randomly offering poor rural households subsidies to migrate leads to a 40% improvement in risk sharing in their villages. Our model of endogenous migration and risk sharing shows that risky and temporary migration opportunities can induce an improvement in risk sharing enabling pro?table migration. Accounting for improved risk sharing, the migration experiment increased welfare by 12.9%. However, permanent declines in migration costs improve outside options for households and can lead to reductions in risk sharing. The short-run experimental results for migration subsidies can differ from the longer-run impacts of a policy that permanently subsidizes migration. |
| Keywords: | Informal Insurance, Migration, Bangladesh, RCT |
| JEL: | D12 D91 D52 O12 R23 |
| Date: | 2019–07 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2185r&r=all |
| By: | Benjamin R. Handel; Jonathan T. Kolstad; Thomas Minten; Johannes Spinnewijn |
| Abstract: | Market provision of impure public goods such as insurance retirement savings and education is common and growing as policy makers seek to offer more choice and gain efficiencies. This approach induces an important trade-off between improved surplus from matching individuals to products and misallocation due to well documented choice errors in these markets. We study this trade-off in the health insurance market in the Netherlands, with a specific focus on misallocation and inequality. We characterize choice quality as a function of predicted health risk and leverage rich administrative data to study how it depends on individual human capital, socioeconomic status and social and information networks. We find that choice quality is low on average, with many people foregoing options that deliver substantive value. We also find a strong choice quality gradient with respect to key socioeconomic variables. Individuals with higher education levels and more analytic degrees or professions make markedly better decisions. Social influence on choices further increases inequality in decision making. Using panel variation in exposure to peers we find strong within firm, location and family impacts on choice quality. Finally, we use our estimates to model the consumer surplus effects of different counterfactual scenarios. While smart default policies could improve welfare substantially, including the choice of a high-deductible option delivers little welfare gain, especially for low-income individuals who make lower quality choices and are in worse health. |
| JEL: | D91 H42 I13 I14 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27785&r=all |
| By: | Marianne Bitler; Hilary W. Hoynes; Diane Whitmore Schanzenbach |
| Abstract: | The COVID-19 crisis has led to spiking unemployment rates with disproportionate impacts on low-income families. School and child-care center closures have also meant lost free- and reduced-price school meals. Food prices have increased sharply leading to reduced purchasing power for families’ limited income. The Families First Coronavirus Act and the CARES Act included robust responses including expansions to unemployment insurance (expansions in eligibility and $600 per week supplement), a one-time payment of $1,200 per adult and $500 per dependent, an increase in SNAP payments, and the launch of the Pandemic EBT program to replace lost school meals. Despite these efforts, real time data show significant distress – notably food insecurity rates have increased almost three times over the pre-COVID rates and food pantry use has also spiked. In this paper, we explore why there is so much unmet need despite a robust policy response. We provide evidence for three explanations: (1) timing - relief came with a substantial delay (due to overwhelmed UI systems/need to implement new programs); (2) magnitude – payments outside UI are modest; and (3) coverage gaps – access is lower for some groups and other groups are statutorily excluded. |
| JEL: | H53 I3 I38 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27796&r=all |
| By: | Chen, Rui; Fang, Di |
| Keywords: | Labor and Human Capital, Demand and Price Analysis, Research Methods/Statistical Methods |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea20:304381&r=all |
| By: | Cortes, Matias (York University, Canada); Forsythe, Eliza (University of Illinois at Urbana-Champaign) |
| Abstract: | Using data from the Current Population Survey (CPS), we show that the COVID-19 pandemic led to a loss of aggregate real labor earnings of more than $250 billion between March and July 2020. By exploiting the panel structure of the CPS, we show that the decline in aggregate earnings was entirely driven by declines in employment; individuals who remained employed did not experience any atypical earnings changes. We find that job losses were substantially larger among workers in low-paying jobs. This led to a dramatic increase in inequality in labor earnings during the pandemic. Simulating standard unemployment benefits and UI provisions in the CARES Act, we estimate that UI payments exceeded total pandemic earnings losses between March and July 2020 by $9 billion. Workers who were previously in the bottom third of the earnings distribution received 49% of the pandemic associated UI and CARES benefits, reversing the increases in labor earnings inequality. These lower income individuals are likely to have a high fiscal multiplier, suggesting these extra payments may have helped stimulate aggregate demand. |
| Keywords: | COVID-19, earnings inequality, unemployment insurance |
| JEL: | J31 J65 J68 H53 H84 E24 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13643&r=all |
| By: | Pons Rotger, Gabriel (VIVE - The Danish Centre for Applied Social Science); Rosholm, Michael (Aarhus University) |
| Abstract: | This paper makes use of the randomized allocation of workers on sick leave in Denmark into self-management support, to examine the role of beliefs about control for prolonged absenteeism due to illness. Our results demonstrate that the ability of the intervention to lead sick-listed workers toward resuming employment crucially depends on workers' control beliefs. The intervention increases the perception of control among control pessimists and substantially accelerates the decision to return to work. Furthermore, we identify a group of control-optimist workers for whom "learning" about control beliefs is self-defeating, and leads them toward reduced capacity in terms of return-to-work performance. |
| Keywords: | sickness insurance, personality traits, randomized control trial, machine learning |
| JEL: | J21 C93 D91 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp13582&r=all |
| By: | Haelim Anderson; Selman Erol; Guillermo Ordoñez |
| Abstract: | Central banks provide public liquidity to traditional (regulated) banks with the intention of stabilizing the financial system. Shadow banks are not regulated, yet they indirectly access such liquidity through the interbank system. We build a model that shows how public liquidity provision may change the linkages between traditional and shadow banks, increasing systemic risk through three channels: reducing aggregate liquidity, expanding fragile short-term borrowing, and crowding out of private cross-bank insurance. We show that the creation of the Federal Reserve System and the provision of public liquidity changed the structure and nature of the U.S. interbank network in ways that are consistent with the model and its implications. We provide empirical evidence by constructing unique data on balance sheets and detailed disaggregated information on payments and funding connections in Virginia. |
| JEL: | D53 D85 E02 E44 G11 G21 G23 N21 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:27721&r=all |