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on Insurance Economics |
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Issue of 2021‒09‒27
eight papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Hanming Fang; Dirk Krueger |
| Abstract: | The Affordable Care Act (ACA) is one of the most important reforms of the US health insurance system since the introduction of Medicare. Since employment is a main source of health insurance for the working age population in the United States, this sweeping health insurance reform also has important implications for the labor market and the macro economy. In this paper, we survey the prototype models that are used in the macro and labor literature, extended to integrate health and health insurance, to study the short- and long-run consequences of the ACA. We also suggest open areas for future research. |
| JEL: | E62 H51 I1 I13 I18 J33 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29240&r= |
| By: | Costa-Font, J.; Ferrer-i-Carbonell, A. |
| Abstract: | Government decentralisation (GD) can provide an alternative to the ‘build in’ accountability mechanism of markets by influencing the choice of and preference for public versus private health care. To test this hypothesis, this paper exploits the gradual decentralisation of the political stewardship of the Spanish National Health System (NHS) to study the effect of GD on the individual choice of public (NHS) and private health care drawing on a difference-in-differences design. We find that ‘turning on’ the decentralization treatment (abandoning centralised governance) increases the preference for public health care (NHS) compared to control regions that did not exhibit any major change in the health care governance in the least a decade. Specifically, we find that GD increases the perceptions of, satisfaction with, and preference for the NHS. Consistently, we also find that the GD reduces the uptake of private health insurance among higher income and education groups. The effects are mainly driven by improvements in health care quality as well as policy innovation and diffusion. |
| Keywords: | devolution; National Health Service (NHS); private health care; private health insurance; health system satisfaction; health care quality; |
| JEL: | H7 I18 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:yor:hectdg:21/16&r= |
| By: | Stephen R. Boucher; Michael R. Carter; Jon Einar Flatnes; Travis J. Lybbert; Jonathan G. Malacarne; Paswel Marenya; Laura A. Paul |
| Abstract: | Risk often inhibits on-farm investment by smallholder farmers. Recent evidence indicates that index insurance and stress tolerant seeds can separately and partially offset this risk effect. In this study, we explore whether the complementarities between these two risk management technologies can be harnessed to underwrite a resilient, high productivity small farm sector. Utilizing a multi-year randomized control trial that spanned two countries and exploits natural variation in weather shocks, we find that drought tolerant maize seeds mitigate the impact of mid-season drought. Compared to farms in control villages, where shocks have persistent effects that reduce future investment and productivity, those with access to both drought tolerant seeds and multi-peril index insurance show greater resilience and immediately bounce back from shocks. Experiential learning is key to realizing this resilience effect: Farmers who experienced shocks intensify their subsequent use of the technologies and exhibit what we call resilience-plus, while those who did not experience shocks disadopt. Together these findings showcase important complementarities between these risk mitigating technologies and the crucial role learning plays in tapping their potential stochastic and dynamic benefits to small farmers. |
| JEL: | O12 O55 Q12 Q14 Q16 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29234&r= |
| By: | R\"udiger Frey; Verena K\"ock |
| Abstract: | In recent years a large literature on deep learning based methods for the numerical solution partial differential equations has emerged; results for integro-differential equations on the other hand are scarce. In this paper we study deep neural network algorithms for solving linear and semilinear parabolic partial integro-differential equations with boundary conditions in high dimension. To show the viability of our approach we discuss several case studies from insurance and finance. |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2109.11403&r= |
| By: | Morvarid Bagherzadeh; Makiko Shigemitsu |
| Abstract: | Turkey is exposed to multiple natural hazard-induced disasters (NHID) and has considerable experience in managing the associated risks. Drought, in particular, has had significant impacts on the country’s agricultural sector, and the frequency of droughts is expected to increase due to climate change. Existing governance and policy frameworks seek to ensure that the agricultural sector is prepared for, and able to respond to, adverse events as they occur. While these mechanisms contribute to improved resilience, further opportunities exist to strengthen policy processes, in particular by increasing farmer and private sector participation. |
| Keywords: | Agricultural risk management, Climate change, Insurance, Irrigation |
| JEL: | Q15 Q16 Q18 Q25 Q28 Q54 |
| Date: | 2021–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:oec:agraaa:167-en&r= |
| By: | Jeremy I. Bulow; Paul D. Klemperer |
| Abstract: | Banks’ reluctance to repair their balance sheets, combined with deposit insurance and regulatory forbearance in recognizing greater risks and losses, can lead to solvency problems that look like liquidity (bank-run) crises. Regulatory forbearance incentivizes banks to both retain risky loans and reject new good opportunities. With sufficient regulatory forbearance, partially-insured banks act exactly as if they are fully insured. Stress tests certify that uninsured creditors will be paid, not that banks are solvent, and have ambiguous effects on the efficiency of investment. |
| JEL: | G10 G21 G28 G32 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29223&r= |
| By: | Solveig Flaig; Gero Junike |
| Abstract: | In this research, we show how to expand existing approaches of generative adversarial networks (GANs) being used as economic scenario generators (ESG) to a whole internal model - with enough risk factors to model the full band-width of investments for an insurance company and for a one year horizon as required in Solvency 2. For validation of this approach as well as for optimisation of the GAN architecture, we develop new performance measures and provide a consistent, data-driven framework. Finally, we demonstrate that the results of a GAN-based ESG are similar to regulatory approved internal models in Europe. Therefore, GAN-based models can be seen as an assumption-free data-driven alternative way of market risk modelling. |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2109.10072&r= |
| By: | Gordon B. Dahl; Matthew M. Knepper |
| Abstract: | Why is workplace sexual harassment chronically underreported? We hypothesize that employers coerce victims into silence through the threat of a retaliatory firing, and test this theory by estimating whether external shocks that reduce the value of a worker's outside options exacerbate underreporting. Under mild assumptions, a rise in the severity of formal complaints is indicative of increased underreporting. Combining this insight with an objective measure of the quality of charges filed with the Equal Employment Opportunity Commission (EEOC), we perform two analyses. First, we assess whether workers report sexual harassment more selectively during recessions, when outside labor market options are limited. We estimate the fraction of sexual harassment charges deemed to have merit by the EEOC increases by 0.5-0.7% for each one percentage point increase in a state-industry's monthly unemployment rate. The effect is amplified in industries employing a larger fraction of men and in establishments with a higher share of male managers. Second, we test whether less generous UI benefits create economic incentives for victims of workplace sexual harassment to remain silent. We find the selectivity of sexual harassment charges increases by more than 30% in response to a 50% cut to North Carolina's Unemployment Insurance (UI) program following the Great Recession. |
| JEL: | J71 J78 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29248&r= |