|
on Insurance Economics |
|
Issue of 2021‒11‒29
fifteen papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Cai, Qingyin; Rao, Xudong; Zhang, Yuehua |
| Keywords: | Agricultural Finance, Livestock Production/Industries |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315356&r= |
| By: | Benedic N. Ippolito (American Enterprise Institute); Michael Batty (Federal Reserve Board of Governors); Christa Gibbs (Consumer Financial Protection Bureau) |
| Abstract: | We use credit reports, survey data, and two natural experiments that increase health insurance coverage—Medicare eligibility and the Affordable Care Act's Under 26 provision—to study the financial protection provided by health insurance. |
| Keywords: | Affordable Care Act Obamacare, debt, economics, Health Care Policy, Medicare |
| JEL: | A |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:aei:rpaper:1008569439&r= |
| By: | Chen, Huang; Liu, Kexin; Hou, Lingling |
| Keywords: | Agricultural Finance, Risk and Uncertainty |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315880&r= |
| By: | Diamond, Rebecca (Stanford U); Dickstein, Michael J. (New York U); McQuade, Timothy (Stanford U); Persson, Petra (Stanford U) |
| Abstract: | We study the dynamics of participation and health care consumption in the Affordable Care Act's health insurance marketplaces. Unlike other health insurance contexts, we find individuals commonly drop coverage midyear--roughly 30% of enrollees exit within nine months of sign-up. While covered, dropouts spend more on health care than in the months before sign-up or after exit. We model the consequences of drop-out on equilibrium premiums and consumer welfare. While dropouts generate a type of adverse selection, the welfare effect from their participation is ambiguous and depends on the relative costs per month of part-year vs. full-year enrollees. In our empirical setting, we find that imposing a penalty that incentivizes participation for at least 3.5 months would lower premium levels and improve overall consumer welfare. |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:3930&r= |
| By: | Arora, Gaurav; Agarwal, Sandip |
| Keywords: | Crop Production/Industries, Risk and Uncertainty |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315884&r= |
| By: | Sandrine Brèteau-Amores; Marielle Brunette; Christophe François; Antoine Leblois; Nicolas Martin-StPaul |
| Abstract: | Drought-induced risk of forest dieback is increasing due to climate change. Insurance can be a good option to compensate potential financial losses associated with forest production losses. In this context, we developed an ex ante index-based insurance model to cope with drought-induced risk of forest dieback. We applied this model to beech and oak forests in France. We defined and then compared different indices from simple ones relying on rainfall indices to more complex ones relying on the functional modelling of forest sensitivity to water stress. After the calibration of the contract parameters, an insurance scheme was optimized and tested. We showed that optimal insurance contracts generate low gain of certain equivalent income, high compensation, and a high basis risk. The best contract was not proportional to the complexity of the index. There was no clear advantage to differentiate contracts based on species. Results highlighting the various perspectives of this first approach are discussed at the end of this paper. |
| Keywords: | Drought; Forest; Index insurance. |
| JEL: | D01 G22 Q23 Q54 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2021-44&r= |
| By: | Patil, Vikram; Veettil, Prakashan Chellattan; Yashodha, Yashodha |
| Keywords: | Risk and Uncertainty |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315232&r= |
| By: | Makarski, Krzysztof (Warsaw School of Economics); Tyrowicz, Joanna (University of Warsaw); Komada, Oliwia (GRAPE) |
| Abstract: | We study the interactions between capital income tax and social security privatization in the context of rising longevity. In an economy with idiosyncratic income shocks, redistributive defined benefit social security provides some insurance against income uncertainty. This insurance comes at the expense of efficiency loss due to labor supply distortions. The existing view in the literature states that reducing this distortion by introducing (partially funded) defined contribution social security would reduce welfare because the loss of insurance and the transitory fiscal gap dominate the efficiency gains. However, prior research financed the transitory costs of the reform by taxing consumption. We show that in the context of longevity, capital income taxation provides a superior alternative: welfare gains are sufficient to outweigh the loss of insurance and transitory fiscal gap. We provide explanations for a mechanism behind this result and we reconcile our results with the earlier literature. |
| Keywords: | longevity, capital income taxation, social security reform, fiscal policy, welfare effects |
| JEL: | C68 D72 E62 H55 J26 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14805&r= |
| By: | Sakketa, Tekalign G.; Kornher, Lukas |
| Keywords: | Agricultural Finance, Labor and Human Capital |
| Date: | 2021–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae21:315113&r= |
| By: | Miss Anke Weber; Mr. Mico Mrkaic; Ms. Li Lin |
| Abstract: | Healthcare in the United States is the most expensive in the world, with real per capita spending growth averaging 4 percent since 1980. This paper examines the role of market power of U.S. healthcare providers and pharmaceutical companies. It finds that markups (the ability to charge prices above marginal costs) for publicly listed firms in the U.S. healthcare sector have almost doubled since the early 1980s and that they explain up to a quarter of average annual real per capita healthcare spending growth. The paper also finds evidence that the Affordable Care Act and Medicaid expansion were successful in raising coverage and expanding care, but may have had the undesirable side-effect of leading to labor cost increases: Hourly wages for healthcare practitioners are estimated to have increased by 2 to 3 percent more in Medicaid expansion states over a five-year period, which could be an indication that the supply of medical services is relatively inelastic, even over a long time horizon, to the boost to demand created by the Medicaid expansion. These findings suggest that promoting more competition in healthcare markets and reducing barriers to entry can help contain healthcare costs. |
| Keywords: | Medicaid expansion; sector markup; healthcare cost; healthcare in the United States; healthcare provider; Wages; Employment; Insurance companies; Insurance; Labor costs; Global |
| Date: | 2021–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/180&r= |
| By: | Hui Jin; Niki Kalavrezou |
| Abstract: | We review Greek public sector healthcare policies and health-related outcomes since 2010.We find that excess spending was successfully curtailed, elements of the institutional framework were modernized, and health outcomes have been relatively favorable. However, especially prior to Covid-19, public healthcare spending had been compressed to potentially unsustainable levels, with widening inequalities and large unmet needs, especially among the poor. Higher public spending and advancing structural healthcare reforms are needed to improve the efficiency and equity of the Greek healthcare system, including strengthening primary healthcare, reducing out-of-pocket payments, and eliminating remaining insurance gaps. |
| Keywords: | healthcare, health policy, structural reforms, health insurance; healthcare reform; reform priority; health outcome; healthcare policy; health policy; Health care spending; Total expenditures; Europe |
| Date: | 2021–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2021/189&r= |
| By: | Moshe A. Milevsky; Thomas S. Salisbury |
| Abstract: | Refundable income annuities (IA), such as cash-refund and instalment-refund, differ in material ways from the life-only version beloved by economists. In addition to lifetime income they guarantee the annuitant or beneficiary will receive their money back albeit slowly over time. We document that refundable IAs now represent the majority of sales in the U.S., yet they are mostly ignored by insurance and pension economists. And, although their pricing, duration, and money's-worth-ratio is complicated by recursivity which will be explained, we offer a path forward to make refundable IAs tractable. A key result concerns the market price of cash-refund IAs, when the actuarial present value is grossed-up by an insurance loading. We prove that price is counterintuitively no longer a declining function of age and older buyers might pay more than younger ones. Moreover, there exists a threshold valuation rate below which no price is viable. This may also explain why inflation-adjusted IAs have all but disappeared. |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2111.01239&r= |
| By: | Gerard J. van den Berg (University of Groningen); Hanno Foerster (Boston College); Arne Uhlendorff (CNRS) |
| Abstract: | This paper provides a structural analysis of the role of job vacancy referrals (VRs) by Employment Agencies in the job search behavior of unemployed individuals, incorporating in- stitutional features of the monitoring of search behavior by the agencies. Notably, rejections of VRs may lead to sanctions (temporary benefits reductions) while workers may report sick to avoid those. We estimate models using German administrative data from social security records linked with caseworker recorded data on VRs, sick reporting and sanctions. The anal- ysis highlights the influence of aspects of the health care system on unemployment durations. We estimate that for around 25% of unemployed workers, removing the channel that enables strategic sick reporting reduces the mean unemployment duration by 8 days. |
| Keywords: | unemployment, wage, unemployment insurance, monitoring, moral hazard, struc- tural estimation, counterfactual policy evaluation, unemployment duration |
| JEL: | J64 J65 C51 C54 |
| Date: | 2021–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:boc:bocoec:1042&r= |
| By: | Jeffrey Clemens (University of California, San Diego and National Bureau of Economic Research); Benedic N. Ippolito (American Enterprise Institute); Stan Veuger (American Enterprise Institute) |
| Abstract: | The likely impact of the COVID-19 pandemic on state and local government revenues is increasingly well understood. |
| Keywords: | Coronavirus, Federalism, Fiscal Policy, Medicaid, State And Local Budgets |
| JEL: | A |
| Date: | 2020–12 |
| URL: | http://d.repec.org/n?u=RePEc:aei:rpaper:1008586598&r= |
| By: | Beetsma, Roel M. W. J. (University of Amsterdam); Komada, Oliwia (GRAPE); Makarski, Krzysztof (Warsaw School of Economics); Tyrowicz, Joanna (University of Warsaw) |
| Abstract: | We analyze the political stability of funded social security. Using a stylized theoretical framework we study the mechanisms behind governments capturing social security assets in order to lower current taxes. The results and the driving mechanisms carry over to a fully-fledged and carefully calibrated overlapping generations model with an aging population. Funding is efficient in a Kaldor-Hicks sense. We demonstrate that, even though we can rationalize the actual introduction of a two-pillar defined-contribution scheme with funding through a majority vote, a new vote to curtail the funded pillar through asset capture or permanent diversion of contributions to the pay-as-you-go pillar always receives majority support. For those alive and thus allowed to vote, the temporary reduction in taxes outweighs the reduction in retirement benefits. This result is robust to substantial intra-cohort heterogeneity and other extensions, and only overturned with a sufficient degree of altruism. Our analysis rationalizes the experience of Central and Eastern European countries, who rolled back their funded pension pillars soon after setting them up. |
| Keywords: | social security, funding, pay-as-you-go, asset capture, majority vote, welfare |
| JEL: | H55 D72 E17 E27 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14765&r= |