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on Insurance Economics |
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Issue of 2021‒10‒11
ten papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Kathryn Bankart; Elise Green; Dineo Lekgeu; Koketso Mano; Mpho Rapapali |
| Abstract: | Why the pandemic is lowering medical insurance inflation |
| Date: | 2021–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:rbz:oboens:11007&r= |
| By: | Grochola, Nicolaus; Browne, Mark Joseph; Gründl, Helmut; Schlütter, Sebastian |
| Abstract: | Market risks account for an integral part of life insurers' risk profiles. This paper explores the market risk sensitivities of insurers in two large life insurance markets, namely the U.S. and Europe. Based on panel regression models and daily market data from 2012 to 2018, we analyze the reaction of insurers' stock returns to changes in interest rates and CDS spreads of sovereign counterparties. We find that the influence of interest rate movements on stock returns is more than 50% larger for U.S. than for European life insurers. Falling interest rates reduce stock returns in particular for less solvent firms, insurers with a high share of life insurance reserves and unit-linked insurers. Moreover, life insurers' sensitivity to interest rate changes is seven times larger than their sensitivity towards CDS spreads. Only European insurers significantly suffer from rising CDS spreads, whereas U.S. insurers are immunized against increasing sovereign default probabilities. |
| Keywords: | Life insurance,interest rate risk,credit risk |
| JEL: | G01 G18 G22 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:icirwp:3921&r= |
| By: | Bruckmeier, Kerstin (Institute for Employment Research (IAB), Nuremberg, Germany); Hohmeyer, Katrin (Institute for Employment Research (IAB), Nuremberg, Germany); Lietzmann, Torsten (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "We investigate which groups of people entered unemployment benefit II receipt between 2010 and 2017 and what role previous unemployment insurance benefit or the loss of employment played. We observe that more than 1 million people enter benefit receipt per year. About one third of these already received benefits within the previous 12 months." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Bundesrepublik Deutschland ; Stichprobe der Integrierten Grundsicherungsbiografien (SIG) ; Dauer ; Erwerbstätige ; Geschlechterverteilung ; Grundsicherung nach SGB II ; Leistungsbezug ; Altersstruktur ; Qualifikationsstruktur ; Staatsangehörigkeit ; Arbeitslose ; Arbeitslosengeld ; Arbeitslosengeld II-Empfänger ; Zu- und Abgänge ; 2010-2017 |
| Date: | 2021–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabkbe:202117&r= |
| By: | Gordon B. Dahl; Matthew 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. |
| Keywords: | sexual harassment, unemployment, unemployment insurance |
| JEL: | J71 J78 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9320&r= |
| By: | Jahn, Elke (Institute for Employment Research (IAB), Nuremberg, Germany); Oberfichtner, Michael (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "The number of business founders who insure themselves against unemployment has decreased substantially over the last years. In 2018, merely 3,000 business founders joined the insurance. Using survey data, this policy brief investigates founders’ decisions to insure against unemployment. Founders can insure themselves against unemployment only within the first three months after start-up. About 24 percent of the respondents who did not insure missed this deadline or consider this period too short, 38 percent claim that they could not afford the contributions when starting their business, and 35 percent did not expect to benefit from the insurance. Many respondents are convinced that their business will not fail or that they will quickly find a job again. However, the Corona crisis makes clear how quickly the economic situation can change and that an insurance against unemployment might be important for the self-employed." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Bundesrepublik Deutschland ; Determinanten ; Freiwilligkeit ; Gründungszuschuss ; Informationsbedarf ; altersspezifische Faktoren ; ökonomische Faktoren ; Quote ; qualifikationsspezifische Faktoren ; Selbständige ; Arbeitslosenversicherung ; Arbeitslosenversicherungsbeitrag ; 2013-2018 |
| Date: | 2020–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabkbe:202011&r= |
| By: | Rossen, Anja (Institute for Employment Research (IAB), Nuremberg, Germany); Roth, Duncan (Institute for Employment Research (IAB), Nuremberg, Germany); Wapler, Rüdiger (Institute for Employment Research (IAB), Nuremberg, Germany); Weyh, Antje (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | Despite the Covid-19 pandemic, we expect an increase in employment in several federal states in the year 2020. For 2021 we predict an increase in all federal states. At the same time, the number of unemployed will decrease next year almost everywhere. With the exception of a number of states in western Germany, this decrease will mainly occur among those unemployed covered by the unemployment insurance scheme as opposed to those receiving welfare benefits. |
| Keywords: | Bundesrepublik Deutschland ; Ostdeutschland ; Westdeutschland ; Pandemie ; Auswirkungen ; Beschäftigungseffekte ; Bundesländer ; Arbeitslosigkeitsentwicklung ; regionaler Vergleich ; Sozialgesetzbuch II ; Sozialgesetzbuch III ; Arbeitslosenquote ; Arbeitsmarktprognose ; 2016-2021 |
| Date: | 2020–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabkbe:202020&r= |
| By: | Seth Giertz; Anil Kumar |
| Abstract: | Advocates of Medicaid expansion argue that federal Medicaid assistance to states fosters economic activity, generating positive local multiplier effects. Furthermore, during economic downturns, Congress regularly tweaks federal match rates for state Medicaid spending – including during the COVID-19 public health emergency – in order to assist states. Despite heavy reliance on Medicaid funding formulas, identifying the economic effect of these federal transfers has proved challenging. This is because federal Medicaid assistance (to states) is endogenous, since funding levels are correlated with unobserved factors driving state economic activity. To address this concern, we construct an instrument based on a slope discontinuity in the federal matching rate for state Medicaid spending. Using state-level panel data from 1990 to 2013, we find that federal Medicaid assistance does stimulate economic activity, but the implied cost per job created is quite high and the multiplier is well below 1. Despite modest economic effects over the entire sample period, we find that federal Medicaid assistance provided powerful fiscal stimulus to states after the Great Recession when the implied multiplier shot up to 1.5. |
| Keywords: | Fiscal Multiplier; Fiscal Stimulus; Medicaid Matching Grants |
| JEL: | C31 E62 I38 H31 |
| Date: | 2021–09–24 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:93141&r= |
| By: | Feridoon Koohi-Kamali; Aida Farmand; Jose Pedro Bastos Neves (Schwartz Center for Economic Policy Analysis (SCEPA)) |
| Abstract: | We develop models of duration of unemployment, for the United States and apply them to the U.S. 1996-2020 biennial Displaced Worker Survey (DWS). Our approach has several notable features relevant to an analysis of unemployment during a deep, persistent recession. We estimate single-spell proportional hazard exponential and Weibull models of transitional probability to full employment, and we test the outcome for robustness to functional forms by distributional free estimation. We test for the impact of unobserved heterogeneity by modeling recession as a Gamma distributed unobservable frailty function commonly employed in biostatistics. We also estimate a non/semi-parametric proportional hazard Cox model of competing risks with three destinations out of unemployment: transition to full-time employment, part-time employment, and inactive job-search status. Our single-destination estimates demonstrate significant differences in the covariate estimates as a result of different base hazards defined for those during the Great Recession and those outside that period. The estimates show gender is the single most important determinant of the duration of unemployment with men’s hazard rate of (re)employment to full-time jobs 7% to 15% lower. When interacted with Unemployment Insurance, being female also accounts for a 10% higher hazard of transition to full-time employment. Our competing risks regression results indicate that Black workers have 28% and 27% lower rates of exit to a full-time and part-time employment respectively following job displacement. |
| Keywords: | unemployment, duration of unemployment, Great Recession, hazard function, multiple transitions |
| JEL: | C1 C41 J2 J6 |
| Date: | 2021–09 |
| URL: | http://d.repec.org/n?u=RePEc:epa:cepawp:2021-03&r= |
| By: | Jose J. Canals-Cerda; Raluca Roman |
| Abstract: | Extant research shows that climate change can impose significant costs on consumers’ wealth and finances. Both sea-level rise and flooding from hurricane events led to high price declines and thus wealth loss for homes in coastal areas or in disaster-struck areas, with effects lingering for a number of years in some cases. In terms of consumer finance, while the average consumer is not always significantly negatively affected by a disaster, the vulnerable groups (those with low credit scores and who are low income) can be severely affected, experiencing higher rates of delinquencies and bankruptcies in the aftermath. Banks help mitigate the negative effects in highly impacted areas by increasing their supply of credit, with more beneficial effects found among small and local lenders. Finally, the impacts of natural disasters and climate change on consumer finance can be further influenced by factors such as government assistance and insurance, which can both improve outcomes and induce moral hazard. We caution, however, that evidence reviewed here may be incomplete and calls for further work on all these important issues. |
| Keywords: | climate change; natural disasters; sea-level rise; consumer finance; house prices |
| JEL: | D10 D14 G50 Q50 Q54 R21 R31 |
| Date: | 2021–10–06 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpdp:93140&r= |
| By: | Andre Luduvice |
| Abstract: | What are the consequences of a nationwide reform of a transfer system based on means-testing toward one of unconditional transfers? I answer this question with a quantitative model to assess the general equilibrium, inequality, and welfare effects of substituting the current US income security system with a universal basic income (UBI) policy. To do so, I develop an overlapping generations model with idiosyncratic income risk that incorporates intensive and extensive margins of the labor supply, on-the-job learning, and child-bearing costs. The tax-transfer system closely mimics the US design. I calibrate the model to the US economy and conduct counterfactual analyses that implement reforms toward a UBI. I find that an expenditure-neutral reform has moderate impacts on agents’ labor supply response but induces aggregate capital and output to grow due to larger precautionary savings. A UBI of $1,000 monthly requires a substantial increase in the tax rate of consumption used to clear the government budget and leads to an overall decrease in the macroeconomic aggregates, stemming from a drop in the labor supply. In both cases, the economy has more equally distributed disposable income and consumption. The UBI economy constitutes a welfare loss at the transition if it is expenditure-neutral and results in a gain in the second scenario. |
| Keywords: | Universal Basic Income; Social Insurance; Overlapping Generations; Labor Supply |
| JEL: | E21 H24 J22 |
| Date: | 2021–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwq:93087&r= |