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on Insurance Economics |
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Issue of 2022‒05‒16
fourteen papers chosen by Soumitra K. Mallick Indian Institute of Social Welfare and Business Management |
| By: | Ryan Defina (International Association of Deposit Insurers) |
| Abstract: | The Survey Brief offers key insights acquired through the IADI Follow-up Survey on COVID-19 Implications for Deposit Insurers, conducted in January 2021. |
| Keywords: | deposit insurance, bank resolution |
| JEL: | G21 G33 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:awl:surbri:1&r= |
| By: | Ropponen, Olli; Kuusi, Tero; Valkonen, Tarmo |
| Abstract: | Abstract This report employs individual-level register data to study the coverage and amounts of voluntary term life insurances, the monetary losses following from the death of a breadwinner, and the life insurance gap arising as the difference of the two. The data include information on the life insurances of Finnish individuals and their individual and household level information between 2018 and 2020. We find that 8 % of the individuals have at least one type of term life insurance in the data. For them the average life insurance is 73 000 €. The take up of life insurances differ between groups, and it is more frequent among working-age, married and higher income individuals. The life insurance gap calculations account for a number of changes in living standards following from a death of a breadwinner, including those in household income, consumption, existing wealth, survivors’ pensions and life insurances. For those individuals who have earned income and who live in families consisting of at least two persons the average life insurance gap is between 65 000 € and 70 000 €. This is the amount of additional life insurance that would retain the consumption possibilities the same as before the breadwinner’s death. For those who have a voluntary life insurance the gap is on average close to zero. Therefore, the life insurance gap arises mainly among those people not having a life insurance at all. |
| Keywords: | Life insurances, Life insurance gap, Households, Social security, Forgone income |
| JEL: | G22 H31 H55 J17 |
| Date: | 2022–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:rif:report:129&r= |
| By: | David Dranove; Craig Garthwaite; Christopher Ody |
| Abstract: | Hospitals face large and variable costs from treating indigent care patients. Two methods of “reinsuring” hospitals against these costs are providing these patients with insurance and directly providing hospitals with supplemental payments to cover the expected costs of treating the indigent. Currently, the U.S. uses a hybrid of these approaches, insuring some indigent patients through Medicaid and providing hospitals with supplemental payments through programs such as Medicaid Disproportionate Share. We evaluate the economic fundamentals of supplemental payments in the U.S. safety net. We find that providing indigent care patients with insurance and providing hospitals with supplement payments are imperfect substitutes to hospitals because they differ in the extent to which they protect hospitals from risk, incentivize cost control, and and incentivize certain investments. Overall, we find that supplemental payments are used to increase access to hospitals in areas with many indigent patients, rather than to provide efficient intertemporal risk-protection to hospitals or incentivize cost control. |
| JEL: | H0 H4 I1 I13 I18 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29892&r= |
| By: | Bert Van Roosebeke (International Association of Deposit Insurers); Ryan Defina (International Association of Deposit Insurers) |
| Abstract: | Understanding and managing the risks associated with COVID-19 is a priority area of concern for deposit insurers on a global basis. This paper investigates quarterly growth rates of covered deposits and finds statistically significant evidence that during the first six quarters of the pandemic, quarterly growth of covered deposits has shifted upwards by 1.5 %-points. On a per-quarter basis, we find evidence of statistically significant increases in the second half of 2020. Results are based on a September 2021 member survey conducted by the International Association of Deposit Insurers in conjunction with the State Corporation Deposit Insurance Agency (Russian Federation). |
| Keywords: | deposit insurance, bank resolution |
| JEL: | G21 G33 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:awl:surbri:2&r= |
| By: | Sarah Croake; Monica Farid; David Wittenburg |
| Abstract: | This brief summarizes evaluation findings at the end of the Promoting Opportunity Demonstration (POD)’s two-year implementation period. POD is a randomized controlled trial that tests two versions of new SSDI work rules with a control group that is subject to current law rules. |
| Keywords: | Social Security Disability Insurance (SSDI), demonstration project, randomized controlled trial, benefit offset, evaluation findings, earnings processing |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:fd26a9987461478a92dff848c8656b1b&r= |
| By: | Augustine Denteh; Helge Liebert |
| Abstract: | We provide new insights regarding the finding that Medicaid increased emergency department (ED) use from the Oregon experiment. We find meaningful heterogeneous impacts of Medicaid on ED use using causal machine learning methods. The treatment effect distribution is widely dispersed, and the average effect is not representative of most individualized treatment effects. A small group—about 14% of participants—in the right tail of the distribution drives the overall effect. We identify priority groups with economically significant increases in ED usage based on demographics and prior utilization. Intensive margin effects are an important driver of increases in ED utilization. |
| Keywords: | Medicaid, ED use, effect heterogeneity, causal machine learning, optimal policy |
| JEL: | H75 I13 I38 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9664&r= |
| By: | Michiko Ogaku |
| Abstract: | This paper shows a result counter to prior work: if infinitely lived individuals' incomes are unobservable, efficient allocations are achieved only at the expense of invoking inequality. An efficient mutual contract with equal opportunities is obtained in a closed-form expression. |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2204.00347&r= |
| By: | David Mann; Isabel Musse |
| Abstract: | This brief describes trends in outcomes before and during the COVID-19 pandemic for treatment group members of the Promoting Opportunity Demonstration (POD). POD is a randomized controlled trial that tests two versions of new SSDI work rules with a control group that is subject to current law rules. |
| Keywords: | Social Security Disability Insurance (SSDI), demonstration project, benefit offset, unemployment, COVID-19, pandemic |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:a92359837ce449869d03f5f80ef46230&r= |
| By: | KOLOMA, YAYA |
| Abstract: | English Since its introduction in 2011, crop insurance in the Sahel (CSI), which appeared as a practical innovation in West Africa, has been struggling to spread in Burkina Faso. As an index-based insurance scheme, it is expected to secure financing for agriculture and preserve farmers' incomes by minimizing the risk of decapitalization in case of drought. After more than 9 years of dissemination, its scope seems very limited. Indeed, the subscription rate remains low, below 10% of the target population. This limited reach can be explained in part by the low level of local and social learning, which reflects both the difficulty of local promoters in mastering and disseminating the product to farmers, and their mistrust, which can be explained by the fact that the expected gain is considered too uncertain, especially compared to more common and better mastered systems. Although some farmers have expressed interest, few rely solely on this system to secure their grain. The use of better controlled instruments such as animal savings, activities diversification, including non-agricultural activities, monetary savings, and crop storage systems explains this limited scope and is part of a broader approach to food security and resilience in the face of multiple hazards, not only climatic ones. French Depuis son introduction en 2011, l’assurance récolte au Sahel (ARS), apparue comme une innovation pratique en Afrique de l’Ouest peine à se diffuser au Burkina Faso. En tant que dispositif assurantiel indiciel, elle est censée sécuriser le financement agricole et préserver le revenu des agriculteurs en minimisant le risque de décapitalisation en cas de sécheresse. Sa portée semble très limitée après plus de 9 années de diffusion. En effet, la souscription reste faible, en dessous de 10% de la population ciblée. Cette faible portée trouve en partie son explication dans le faible apprentissage local et social montrant aussi bien la difficulté des promoteurs locaux à maitriser et à diffuser le produit auprès des agriculteurs qu’une méfiance de ces derniers, s’expliquant par une espérance de gain considérée comme trop aléatoire, surtout comparée à des dispositifs plus communs et mieux maitrisés. Bien que certains agriculteurs se soient intéressés, rares sont ceux qui comptent uniquement seulement sur ce dispositif pour sécuriser leurs céréales. La confiance en des instruments mieux maitrisés comme l’épargne animale, la diversification des activités y compris celles non-agricoles, l’épargne monétaire, les systèmes de stockage des récoltes, le salariat agricole, entre autres, explique cette portée limitée et s’inscrit dans une logique plus large de sécurité alimentaire et de résilience face aux aléas multiples, pas seulement climatiques. |
| Keywords: | Agricultural insurance, agricultural loan, smallholders’ farmers, Burkina Faso |
| JEL: | D1 G21 G22 Q12 Q14 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:112834&r= |
| By: | Hilary W. Hoynes; Nicole Maestas; Alexander Strand |
| Abstract: | Legal representatives play a prominent role in the Social Security Disability Insurance adjudication process, earning fees totaling $1.2 billion in 2019. Long ubiquitous in appellate hearings, disability representatives—including attorneys and non-attorneys—have begun appearing more frequently at the beginning of cases, during the initial review. This development has raised questions about the motives of disability law firms, who are sometimes perceived to prioritize their own interests in response to incentives in the fee structure set by the Social Security Administration. We provide the first estimates of the causal impact of legal representation on case outcomes when representatives are engaged from the initial stage. To address selection into representation, we instrument for initial representation using geographic and temporal variation in disability law firm market shares in the closely related but distinct appellate market. We find that representation increases the probability of initial awards, reduces the probability of appeals, and induces no detectable change in the ultimate probability of award. This pattern indicates that legal representation in the initial stage leads to earlier disability awards to individuals who would otherwise be awarded benefits only on appeal. Furthermore, by securing earlier awards and discouraging unsupported appeals, representation reduces total case processing time by nearly one year. |
| JEL: | H55 J14 K15 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29871&r= |
| By: | XIE Mingjia; YIN Ting; ZHANG Yi; OSHIO Takashi |
| Abstract: | Declining fertility and increasing health expenditure associated with aging populations pose great challenges to public finance globally. This paper studies the hidden cost of fertility by analyzing the causal effect of fertility on the elderly’s healthcare utilization. We use the instrumental variable approach to account for the potential endogeneity in the fertility choice, exploiting the exogenous variations in fertility induced by the "1.5-Child Policy" in rural China. We find that having more children increases the probability and out-of-pocket expenditures of using formal and informal healthcare. Increased healthcare use can be driven by deteriorating physical and mental health and increasing intergenerational support. Children of the elderly are more likely to help them pay health costs and make monetary transfers to their parents, suggesting that the increased burden of healthcare cost is partly borne by the children. Women and lower educated parents who have limited economic resources and less generous health insurance tend to bear a higher increase in health costs with more children. The results imply that the true cost of birth-encouraging policies can be underestimated if the effect of fertility on healthcare utilization is overlooked, and such policies might increase inequality if no supportive measures are provided to disadvantaged groups. |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:22033&r= |
| By: | Zoe B. Cullen; Will S. Dobbie; Mitchell Hoffman |
| Abstract: | State and local policies increasingly restrict employers’ access to criminal records, but without addressing the underlying reasons that employers may conduct criminal background checks. Employers may thus still want to ask about a job applicant’s criminal record later in the hiring process or make inaccurate judgments based on an applicant’s demographic characteristics. In this paper, we use a field experiment conducted in partnership with a nationwide staffing platform to test policies that more directly address the reasons that employers may conduct criminal background checks. The experiment asked hiring managers at nearly a thousand U.S. businesses to make incentive-compatible decisions under different randomized conditions. We find that 39% of businesses in our sample are willing to work with individuals with a criminal record at baseline, which rises to over 50% when businesses are offered crime and safety insurance, a single performance review, or a limited background check covering just the past year. Wage subsidies can achieve similar increases but at substantially higher cost. Based on our findings, the staffing platform relaxed the criminal background check requirement and offered crime and safety insurance to interested businesses. |
| JEL: | C93 J23 J24 M51 |
| Date: | 2022–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29947&r= |
| By: | Michael E. Darden; Robert Kaestner |
| Abstract: | The contribution of cigarette smoking to national health expenditures is thought to be large, but our current understanding of the effect of smoking on annual medical expenditures is limited to studies that use cross-sectional data to make comparisons of medical care expenditures between smokers and never smokers at a particular age. We develop a dynamic economic model of smoking and medical care use that highlights two forms of selection: selective mortality and non-random cessation. To test predictions from our model, we construct novel longitudinal profiles of medical expenditures of smokers and never smokers from merged National Health Interview Survey and Medicare claims information. Consistent with our theory, we find that, from a given age, smokers generate higher expenditures prospectively, because of a higher incidence in inpatient usage, and lower expenditures retrospectively, because of lower outpatient usage. Between ages 65 and 84, we find that the expected value of the discounted sum of total expenditures is lower for smokers, mainly because of excess mortality. We find no evidence that cigarette smoking is a burden on Medicare. |
| JEL: | I1 I12 I18 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29885&r= |
| By: | Bruno Coquet (DARES - Direction de l'animation de la recherche, des études et des statistiques - Ministère du Travail, de l'Emploi et de la Santé) |
| Abstract: | La réforme de l'assurance chômage était l'une des pierres angulaires du projet présidentiel. Il s'agissait notamment de « simplifier le droit, réformer l'assurance chômage pour en faire un droit universel » (ouverture aux démissionnaires et indépendants), mais aussi « combattre la précarité en responsabilisant les employeurs par la création d'un bonus-malus », en contrepartie « d'exigences nouvelles pour chacun » et d'une « amélioration du pouvoir d'achat de tous les travailleurs » (« salariés, indépendants et fonctionnaires ») « sans que cela ne revienne plus cher aux employeurs ». En réalité, l'assurance chômage n'a pas subi une réforme mais deux : d'abord une réforme institutionnelle aussi structurante que rondement menée, puis la réforme bien connue des règles d'indemnisation, compliquée et étirée dans le temps, en raison de la crise sanitaire et des recours en Conseil d'État de ses opposants. Au total le résultat est très différent de ce qui était annoncé. |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03615525&r= |