|
on Insurance Economics |
|
Issue of 2022‒01‒24
eight papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Malani, Anup (University of Chicago); Holtzman, Phoebe; Imai, Kosuke (Harvard University); Kinnan, Cynthia (NBER); Miller, Morgen (University of Chicago); Swaminathan, Shailender (Sai University); Voena, Alessandra (Stanford University); Woda, Bartosz (University of Chicago); Conti, Gabriella (University College London) |
| Abstract: | We report on a large randomized controlled trial of hospital insurance for above-poverty-line Indian households. Households were assigned to free insurance, sale of insurance, sale plus cash transfer, or control. To estimate spillovers, the fraction of households offered insurance varied across villages. The opportunity to purchase insurance led to 59.91% uptake and access to free insurance to 78.71% uptake. Access increased insurance utilization. Positive spillover effects on utilization suggest learning from peers. Many beneficiaries were unable to use insurance, demonstrating hurdles to expanding access via insurance. Across a range of health measures, we estimate no significant impacts on health. |
| Keywords: | health insurance, health, randomized controlled trial, spillovers |
| JEL: | O10 I13 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14924&r= |
| By: | Atal, Juan Pablo; Fang, Hanming; Karlsson, Martin; Ziebarth, Nicolas R. |
| Abstract: | To insure policyholders against contemporaneous health expenditure shocks and future reclassification risk, long-term health insurance constitutes an alternative to community-rated short-term contracts with an individual mandate. In this paper, we study the German long-term health insurance (GLTHI) from a life-cycle perspective. The GLTHI is one of the few real-world long-term health insurance markets. We first present and discuss insurer regulation, premium setting, and the main market principles of the GLTHI. Then, using unique claims panel data from 620 thousand policyholders over 7 years, we propose a new method to classify and model health transitions. Feeding the empirical inputs into our theoretical model, we assess the welfare effects of the GLTHI over policyholders' lifecycle. We find that GLTHI achieves a high level of welfare against several benchmarks. Finally, we conduct counterfactual policy simulations to illustrate the welfare consequences of integrating GLTHI into a hybrid insurance system similar to the current system in the United States. |
| Keywords: | long-term health insurance,individual private health insurance,reclassification risk,intertemporal incentives,ACG scores,health transitions |
| JEL: | G22 I11 I18 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:21094&r= |
| By: | Maclean, Catherine; Pichler, Stefan; Ziebarth, Nicolas R. |
| Abstract: | This paper evaluates how sick pay mandates operate at the job level in the United States. Using the National Compensation Survey and difference-in-differences models, we estimate their impact on coverage rates, sick leave use, labor costs, and non-mandated fringe benefits. Sick pay mandates increase coverage significantly by 18 percentage points from a baseline level of 66% in the first two years. Newly covered employees take two additional sick days per year. We find little evidence that mandating sick pay crowds-out non-mandated fringe benefits. Finally, we develop a model of optimal sick pay provision and illustrate the trade-offs when assessing welfare. |
| Keywords: | sick pay mandates,take-up,social insurance,fringe benefits,moral hazard,unintended consequences,medical leave,National Compensation Survey,optimal social insurance,Baily-Chetty,welfare |
| JEL: | I12 I18 J22 J28 J32 J38 J88 H75 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:21083&r= |
| By: | Holzer, Harry J. (Georgetown University); Hubbard, Glenn (Columbia University); Strain, Michael R. (American Enterprise Institute for Public Policy Research) |
| Abstract: | The generosity of Unemployment Insurance (UI) benefits was expanded during the pandemic (FPUC), along with the groups of workers eligible for benefits (PUA). These two programs were set to expire in September 2021, but 18 states opted out of both in June 2021. Using Current Population Survey data, we present difference-in-difference and event study estimates that the flow of unemployed workers into employment increased by over one half following early termination. We construct a counterfactual scenario that implies the national unemployment rate in each of July and August would have been around 0.3 percentage point lower than they were, and the employment-population ratio would have been around 0.1-0.2 percentage point higher than it was, had all states ended FPUC and PUA in June. Expanded eligibility and generosity of UI may have both slowed transitions from unemployment to employment. We also present some suggestive evidence that households with relatively high confidence in their ability to meet expenses may have been less sensitive to the termination of expanded benefits. Finally, we present evidence that early termination reduced the share of households that had no difficulty meeting expenses by five percent. The welfare implications of the early termination of FPUC and PUA are therefore ambiguous. |
| Keywords: | unemployment insurance, FPUC, PUA, unemployment rate |
| JEL: | J08 J65 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14927&r= |
| By: | Ling Wang; Mei Choi Chiu; Hoi Ying Wong |
| Abstract: | This paper investigates the time-consistent mean-variance reinsurance-investment (RI) problem faced by life insurers. Inspired by recent findings that mortality rates exhibit long-range dependence (LRD), we examine the effect of LRD on RI strategies. We adopt the Volterra mortality model proposed in Wang et al.(2021) to incorporate LRD into the mortality rate process and describe insurance claims using a compound Poisson process with the intensity represented by stochastic mortality rate. Under the open-loop equilibrium mean-variance criterion, we derive explicit equilibrium RI controls and study the uniqueness of these controls in cases of constant and state-dependent risk aversion. We simultaneously resolve difficulties arising from unbounded non-Markovian parameters and sudden increases in the insurer's wealth process. We also use a numerical study to reveal the influence of LRD on equilibrium strategies. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.06602&r= |
| By: | Harry J. Holzer; R. Glenn Hubbard; Michael R. Strain |
| Abstract: | The generosity of Unemployment Insurance (UI) benefits was expanded during the pandemic (FPUC), along with the groups of workers eligible for benefits (PUA). These two programs were set to expire in September 2021, but 18 states opted out of both in June 2021. Using Current Population Survey data, we present difference-in-difference and event study estimates that the flow of unemployed workers into employment increased by around two-thirds following early termination. We construct a counterfactual scenario that implies the national unemployment rate in each of July and August would have been around 0.3 percentage point lower than they were, and the employment-population ratio would have been around 0.1-0.2 percentage point higher than it was, had all states ended FPUC and PUA in June. Expanded eligibility and generosity of UI may have both slowed transitions from unemployment to employment. We also present some suggestive evidence that households with relatively high confidence in their ability to meet expenses may have been less sensitive to the termination of expanded benefits. Finally, we present evidence that early termination reduced the share of households that had no difficulty meeting expenses by five percent. The welfare implications of the early termination of FPUC and PUA are therefore ambiguous. |
| JEL: | J08 J65 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29575&r= |
| By: | Tobias Fissler; Michael Merz; Mario V. W\"uthrich |
| Abstract: | A main difficulty in actuarial claim size modeling is that there is no simple off-the-shelf distribution that simultaneously provides a good distributional model for the main body and the tail of the data. In particular, covariates may have different effects for small and for large claim sizes. To cope with this problem, we introduce a deep composite regression model whose splicing point is given in terms of a quantile of the conditional claim size distribution rather than a constant. To facilitate M-estimation for such models, we introduce and characterize the class of strictly consistent scoring functions for the triplet consisting a quantile, as well as the lower and upper expected shortfall beyond that quantile. In a second step, this elicitability result is applied to fit deep neural network regression models. We demonstrate the applicability of our approach and its superiority over classical approaches on a real accident insurance data set. |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2112.03075&r= |
| By: | Ellul, Andrew; Pagano, Marco; Scognamiglio, Annalisa |
| Abstract: | The finance wage premium since the 1990s has arguably lured talent away from other industries. However, the allocation of talent is likely to respond to differences in career paths, not in wages at a given date. We use resume data to reconstruct the careers of 11,255 professionals in finance, high-tech and services from 1980 to 2017, and find that careers mostly develop within sectors. Careers in asset management feature higher and steeper pay profiles than those of employees in banking, insurance and non-finance, yet this career premium cannot be explained by higher risk. Labor market entry responds positively to career premia in asset management and high-tech, and these sectors are regarded as substitutes by potential entrants, consistently with high-tech competing with asset management in attracting talent. |
| Keywords: | careers,finance premium,asset management,labor market entry,high-tech |
| JEL: | G20 G23 J24 J62 J63 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:674&r= |