Policy relevant heterogeneity in the value of statistical life: New evidence from panel data quantile regressions

We examine differences in the value of statistical life (VSL) across potential wage levels in panel data using quantile regressions with intercept heterogeneity. Latent heterogeneity is econometrically important and affects the estimated VSL. Our findings indicate that a reasonable average cost per expected life saved cut-off for health and safety regulations is 7 million to7 million to 8 million per life saved, but the VSL varies considerably across the labor force. Our results reconcile the previous discrepancies between hedonic VSL estimates and the values implied by theories linked to the coefficient of relative risk aversion. Because the VSL varies elastically with income, regulatory agencies should regularly update the VSL used in benefit assessments, increasing the VSL proportionally with changes in income over time.     

Controlling for causality in the link from income to mortality

While previous research shows that wealthier people tend to live longer, it is not clear whether this occurs because wealthy people make greater investments in health and safety or because inherently healthy people tend to make more money. This article uses measures of initial health to focus on the flow from wealth to good health. While the estimated link between income and mortality is less than in other articles, we find that a significant link still remains. In particular, we estimate that health and safety regulations, which cost more than $12.2 million per life saved, are likely to kill more people through increased poverty than they save directly. Estimates of costs per life saved provided by the Office of Management and Budget suggest that many health and safety programs implemented in the last 20 years would be eliminated using this criterion.     

The prevalence and composition of asset poverty in Canada: 1999, 2005, and 2012

A household is considered asset poor if its assets (financial assets or net worth, taken separately) are insufficient to maintain well‐being at a low‐income threshold for 3 months. We provide the first national‐level estimates of asset poverty for Canada, using the 1999, 2005, and 2012 cycles of the Survey of Financial Security, and juxtapose these estimates with income poverty. The analysis provides new insight into economic insecurity by showing that asset poverty rates are consistently two to three times higher than income poverty rates. In addition to the prevalence of asset poverty across socio‐demographic groups, we analyzed how the composition of the poor change over time. Age and geography shape the risk for asset poverty in distinct ways. We found that while education appears to play a comparable role in shaping both income poverty and asset poverty, immigration places Canadians at a relatively higher risk of income poverty but not asset poverty. Key Practitioner Message: ? Practitioners ought to consider assets as well as income in assessing economic vulnerability; ? Asset poverty levels are 2–3 times higher than income poverty levels; ? Certain groups (e.g., immigrants) may be income poor but maintain sufficient assets.     

Public Policy,Economic Inequality,and Poverty: The United States in Comparative Perspective*

Objective. This article compares recent levels and trends in economic inequality in industrialized nations, largely those belonging to the Organization for Economic Cooperation and Development. We also examine the effects of government policies and social spending efforts on inequality. Method. We use data from the Luxembourg Income Study and the U.S. Congressional Budget Office to measure disposable money income on an annual basis for 30 nations around the end of the 20th century. We also convert the incomes of a set of rich nations into real 2000 U.S. dollars, using a standard measure of purchasing power parity to examine absolute differences in income inequality. Results. The United States has the highest overall level of inequality of any rich OECD nation at the beginning of the 21st century. Moreover, increases in the dispersion of total household income in the United States have been as large as, or larger than, those experienced elsewhere between 1979 and 2002. Government policies and social spending have lesser effects in the United States than in any other rich nation, and both low spending and low wages have a great impact on the final income distribution, especially among the nonelderly. Conclusion. We speculate on the role policy plays in the final determination of income inequality. We argue that these differences cannot be explained by demography (single parents, immigrants, elders) but are more likely to be attributed to American institutions and lack of spending effort on behalf of low‐income working families.     

Mortality risks induced by the costs of regulations

Regulatory costs are ultimately paid for by the individuals in our society. The reduction in disposable income can lead to changes in purchasing, such as for safety and health care; stress, such as from job loss; and behavior, such as smoking or alcohol consumption. On average, these changes induce greater mortality risks and lead to premature deaths. This paper examines cases in which regulatory costs are primarily placed either on the general public or on individuals in a specific industry. Several policy issues concerning the mortality risks of regulatory costs are addressed. Neglecting the consideration of the fatalities induced by regulatory costs in the setting of regulations will lead to unnecessary deaths of Americans.     

The State and its Welfare State: How do Welfare State Changes Affect the Make‐up of the Nation State?

With respect to changes in the welfare states of OECD countries, scholars most of the time are looking for common trends; that is, they look for similar movements in different states, such as welfare state retrenchment, recalibration, etc. As we show in this article, data on welfare state spending and financing do not, however, support such stark tendencies like retrenchment. We therefore suggest looking for corridor effects rather than level effects, i.e. analysing changes in the dispersion of welfare state regimes rather than shifts in the mean values. Our analysis suggests that convergence, i.e. decreasing diversity among states in spending, financing and regulation patterns, may have been the most important pattern of welfare state change in the last three decades – a pattern easily overlooked in past and current research. Convergence of welfare state regimes also affects our views on the modern nation state itself since the varieties of welfare capitalism in the twentieth century are themselves an expression of the sovereignty and autonomy of the nation state. If nation states are forced to surrender national particularities, to mellow their characteristic differences and to move incrementally towards a one‐size‐fits‐all common model via ‘shrinking corridors’, such a blurring of welfare regimes, such a beclouding of difference, should also be regarded as a significant change taking place in the centre of the Western nation state's make‐up.     

After the tax revolt: Why Medicare matters more to middle Australia than lower taxes

The Australian Survey of Social Attitudes 2003 gives new insights into the public's increasing preference for more social spending and their willingness to pay more taxes to fund services. This paper profiles the new electorate and discusses factors driving this trend in public opinion. Multivariate analysis allows us to identify the key demographic, political and policy variables that predict support for spending. All the usual factors matter: being older and more educated, and identifying as Labor, Green or Democrat all predict support for higher spending. But we find that policy perceptions matter as well: believing that health and Medicare and/or public education have declined in the past two years brings major support for increased spending. We also find that the Australian public supports modest tax increases to fund spending on health and education and that the Australian electorate is more open minded about tax rises than conventional wisdom holds. Our main conclusions are that support for social spending over reduced taxes has increased over the past two decades, and especially after the election of the Howard Government, and that dissatisfaction with health and Medicare, and public education, are reshaping the fiscal preferences of the Australian electorate.     

PUBLIC ATTITUDES TOWARDS GOVERNMENT SPENDING ON HEALTH CARE

One of the most vigorously debated topics in the area of health care is the proportion of health care costs that should be borne by the government, rather than by the individual. Using nationally representative data, the views of Australian citizens on this issue are explored. The findings suggest that the majority of Australians favour increased spending on health by the government. Multiple regression analyses indicate that in addition to various sociodemographic factors, political partisanship and political efficacy are strong, significant predictors of attitudes towards health spending by the government. The policy implications of these findings are discussed.     

Zakat as a Poverty Reduction Mechanism Among the Muslim Community: Case Study of Bangladesh,Malaysia, and Indonesia

Poverty reduction remains the most important challenge for policy makers in Islamic communities. The World Bank (2010: Poverty profile in Muslim world, from http://www.worldbank.org ) estimates that approximately 3 billion people are living in poverty and 46 million more people will come under the income level of US$1.25 a day due to the recent global economic meltdown and slow economic growth rates. Thirty‐five percent of these people are Muslims from Islamic countries. The global Muslim community has an essential role to play in addressing the injustice of global poverty through zakat. Zakat is an Islamic faith‐based institution and is being underutilized for poverty reduction in many of these poor Muslim countries. Since zakat constitutes one of the pillars of Islam, it is logical to assume that policy makers among Muslims should pay serious attention to it. However, that is not the case for many Muslim countries and this paper will show that not all Muslim countries are seriously applying zakat in its strategy of combating poverty. This paper will specifically examine the role and effect of zakat in three Muslim countries (Bangladesh, Malaysia and Indonesia) providing the facts of countries that practise zakat in comparison with those that do not.     

The Choice Revolution: Privatization of Swedish Welfare Services in the 1990s

During the 1990s, the Swedish welfare state was declared by some to be in a “crisis”, due to both financial strain and loss of political support. Others have argued that the spending cuts and reforms undertaken during this period did slow down the previous increase in social spending, but left the system basically intact. The main argument put forward in this article is that the Swedish welfare state has been and is still undergoing a transforming process whereby it risks losing one of its main characteristics, namely the belief in and institutional support for social egalitarianism. During the 1990s, the public welfare service sector opened up to competing private actors. As a result, the share of private provision grew, both within the health‐care and primary education systems as well as within social service provision. This resulted in a socially segregating dynamic, prompted by the introduction of “consumer choice”. As will be shown in the article, the gradual privatization and market‐orientation of the welfare services undermine previous Swedish notions of a “people's home”, where uniform, high‐quality services are provided by the state to all citizens, regardless of income, social background or cultural orientation.     

Protective legislation: The “third pillar” of the welfare state

Welfare states are built upon three central social policy pillars: (1) income programs, including an assortment of income maintenance and security benefits; (2) social services, comprising a diverse constellation of provisions, which furnish care such as health care and education, and “in kind” benefits; and (3) protective legislation, encompassing a dense web of proactive and preventative laws, rights, and entitlements, such as health and safety legislation, minimum wage laws, child protection acts, rent controls, and laws governing evictions and foreclosures. Despite its centrality to the welfare state and to our well‐being, this third pillar has received considerably less attention in comparative social policy research. The dominant welfare state typologies have focused almost exclusively upon income measures and, more recently, on social services, to construct their welfare state categories or “worlds” of welfare while largely neglecting this crucial third pillar. A greater focus on protective welfare legislation can help sharpen the distinctions among welfare states within and across the welfare worlds, which is particularly valuable in light of the ongoing erosion of the other two pillars over the past few decades.     

The State Children's Health Insurance Program: Participation and Substitution

We examine the effects of SCHIP enactment by focusing on two policy concerns: take-up and crowd-out. The literature has examined how income eligibility expansions affect the type of children's insurance coverage. However, states jointly implemented various policy instruments. The results in previous works do not control for this variety. We analyze how changes in several SCHIP factors affected decisions regarding health insurance coverage. Our analysis indicates that the estimates in the literature may have combined the effects of various policy factors. In distinguishing individual policy factors, our results provide useful information for designing effective public health insurance programs.     

The marginal value of job safety: A contingent valuation study

This article estimates the marginal value of safety based on contingent values obtained in a labor-market-oriented national random-sample mail survey. Thus, worker preferences for safety are assessed directly, in contrast to the hedonic price method that has been used almost exclusively in related studies. Key aspects of this article are that (1) contingent values are obtained for small changes in risks of job-related fatal accidentsperceived by respondents, and (2) relationships are analyzed between respondents' marginal safety values and their income, socioeconomic/demographic characteristics, union membership status, and initial levels of risk faced.     

Latino Adolescents' Community Violence Exposure: After‐school Activities and Familismo as Risk and Protective Factors

Low‐income, urban adolescents are exposed to extremely high rates of witnessing and being victimized by community violence. Such violence exposure presents serious implications for youth's development and psychological well‐being. In a sample of 223 ninth‐grade Latino adolescents, we examine: (1) what types of after‐school activity participation increase or reduce adolescents' risk for violence exposure and (2) the role of the cultural value of familismo in moderating the impact of violence exposure on adolescents' psychological well‐being. Our results indicate that spending unstructured leisure time with peers and participating in non‐school sports and non‐school clubs were associated with higher levels of community violence exposure, whereas adhering to the cultural value of familismo was associated with lower levels of violence exposure. Additionally, familismo moderated the positive association between violence exposure and depressive symptoms, but not posttraumatic stress disorder symptoms. Implications of these results are discussed.     

Social Insurance and Older Adults in China: Effect of Education and Household Income on Coverage Following the 2009 Health Reform

Abstract

Education and income have been considered two primary determinants to affect individuals’ health outcomes. China initiated a comprehensive health reform in 2009, with the goals to provide equal access yet sufficient healthcare to all residents. However, social disparities continue to persist following this large reform. This research hypothesized that older adults’ years of education and income are determinants of participation in each social insurance scheme following the 2009 health reform. Multilevel logistic regression models were used with a nationally representative sample (n?=?5,274) to investigate the education and income disparities in each social insurance scheme for older adults, with random effects among provinces at the national level. The analyses show that years of education was not associated with enrollment in three social insurances, with the exception of the association between 11?years of formal education or above and the rural coverage. Participants with higher levels of household income had greater odds of having urban social insurances, but had lower odds of having the rural scheme. Further research should continue to investigate the disparities of enrollment of each social insurance. Chinese policy makers should consider these social factors carefully to reach a true universal coverage.     

The effectiveness of Luxembourg's minimum guaranteed income

Using micro‐data for the year 2007, this article analyzes the effectiveness of Luxembourg's minimum guaranteed income (revenu minimum garanti — RMG) social assistance programme. First, we examine the effectiveness of the RMG by comparing the proportion of eligible households based on the different criteria for the years 2007 and 1986, and find that, in 2007, 5.5 per cent of households were eligible versus 3.75 per cent in 1986. A relaxation of the RMG's eligibility criteria implies that more low‐income households should have access to the RMG. As a second measure of programme effectiveness, the article estimates the extent of non‐takeup behaviour among those eligible for the RMG in 2007. It is found that just over 65 per cent of all households potentially entitled to the RMG do not claim. Regression analysis of the potential determinants of non‐takeup behaviour confirms the hypotheses derived from theoretical models in the literature, i.e. that rational motivation, such as the expected net utility from claiming, and stigma, play a major role in explaining levels of non‐takeup.     

Quality Assurance, Pre-Sentence Reports and the Probation Service

Correspondence to Dr Peter Raynor, Applied Social Studies, University of Wales, Swansea, Wales SA2 8PP. Summary During the months immediately preceding the implementation ofthe 1991 Criminal Justice Act the Home Office commissioned astudy of quality assurance and quality control procedures usedby probation services in their work on social inquiry reportsand in their preparation for the change to pre-sentence reports.This paper summarizes the results of that study, which includeda survey of current practice in probation services and the developmentof a quality control instrument for assessing the quality ofpre-sentence reports. It is emphasized that the views expressedin this paper are those of the authors and not necessarily thoseof the Home Office.     

Relationships Among Caregiving,Income, Gender,and Health: A Cross-Sectional Examination of a Representative Sample of Older Americans

Although there is substantial evidence to support the effect of burden on caregivers, few studies have compared caregivers to their noncaregiving counterparts on the basis of health and well-being outcomes. This study examines the relationship between caregiving and health and whether other factors may have stronger influence on well-being measures. Using a nationally representative sample of older adults in the United States (N = 3,005), this study examines relationships between caregiving status, gender, and income, and 9 outcomes (self-rated physical and mental health, time since seeing a doctor, time since most recent pap smear or prostate-specific antigen [PSA] test, depression, loneliness, stress, anxiety), using logistic and linear regression models. Results support that paradoxically, caregiving was associated with increased likelihood of PSA test in male caregivers, although data also indicated higher levels of anxiety and stress, as might be expected. Income was associated with 8 of 9 outcomes, and gender predicted depression, anxiety, stress, and self-rated mental health. The study highlighted the importance of psychosocial stressors, such as income and gender, on the health outcomes of older adults who may be caregiving. Considering complexity of unique experience is necessary to accurately assess vulnerability to poor mental health or health-related outcomes.     

The Value of a Statistical Life and the Coefficient of Relative Risk Aversion

Individuals’ risk preferences are estimated and employed in a variety of settings, notably including choices in financial, labor, and product markets. Recent work, especially in financial economics, provides estimates of individuals’ coefficients of relative risk aversion (R’s) in excess of one, and often significantly higher. However, it can be shown that high R’s imply equally high values for the income elasticity of the value of a statistical life. Yet estimates of this elasticity, derived from labor and product markets, are in the range of 0.5 to 0.6. Furthermore, it turns out that even an R below one is difficult to reconcile with these elasticity estimates. Thus, there appears to be an important (additional) anomaly involving individuals’ risk-taking behavior in different market settings.JEL Classification: D80, G11, G12, I10, J17     

Demographic and Welfare State Predictors of Out-of-Pocket Health Expenditures: A Path Analytic Model

ABSTRACT

Out-of-pocket (OOP) payments are principal components of financing healthcare and have a significant effect on poverty in numerous developing countries. The present study seeks to ascertain the relation among demographic, welfare state, and OOP health expenditure indicators using a path analysis. National representative household budget data from the Turkish Statistical Institute for 2015 were used. To test the goodness of fit of the model, multiple fit indices were utilized. The model fit for redefined path analytic model data was good (X²/df = 70.20/9 = 7.8; RMSEA = 0.032; GFI = 1.00; AGFI = 0.99; CFI = 0.99). The results of the analysis revealed that demographic and welfare indicators are causally related to OOP health expenditures, and income was a mediating factor for this interrelationship. Designing of socially inclusive policies on the basis of the values of equity is essential to combat poverty due to OOP health expenditures in developing countries.