Trade liberalization and labor market disruption

In the depressed economic climates which have prevailed in recent years, the most common ground for opposing trade liberalization has been fear of the short-run adjustment costs, especially in the labor market. A computable general equilibrium model (ORANI) is used to explore the amount of occupational disruption (on a 72-occupation classification) likely to be generated in the Australian labor market by four alternative trade-liberalization packages, all of which reduce the average rate of protection by 25 percent. We conclude that in all cases the disruption involved would be slight relative to historically experienced occupational change.     

Models for estimating discount rates for long-term health risks using labor market data

This article utilizes evidence from job choices involving fatality risks to estimate individual discount rates for adverse health outcomes. The study compares the results from five distinct models for estimating discount rates from labor market data. The estimated discount rates range from 1% to 14% with confidence intervals that usually include financial market rates for the same period. This result, and consistent findings of significant compensating differentials for fatality risk, provide strong support for life-cycle models of individual rationality in the choice of job risks. Discounted value-of-life estimates are also developed and compared to the crosssection estimates that are more prevalent in the literature.     

Trend inflation,the labor market wedge,and the non-vertical Phillips curve

Recent developments in macroeconomics resurrect the view that welfare costs of inflation arise because the latter acts as a tax on money balances. Empirical contributions show that wage re-negotiations take place while expiring contracts are still in place. Bringing these seemingly unrelated aspects together in a stylized general equilibrium model, we find a disciplining effect of a positive inflation target on the wage markup and identify a long-term trade-off between inflation and output. This has important policy implications, ranging from the opportunity of revising the target in response to shocks, to the possibility of exploiting inflation as a tool to increase tax revenues via its employment-enhancing effect.     

Genetic screening technology: ethical issues in access to tests by employers and health insurance committees

Whereas the introduction of new technologies previously has raised the ethical question of who ought to have access to a new procedure or device, genetic testing technology raises the new ethical question of to whom access to a new technology ought to be limited. In this article we discuss the implications of employers and private health insurance companies having access to genetic testing technology. Although there may be legitimate business interests in allowing employers and insurers to conduct genetic screening, there are other valid societal interests in regulating or limiting the use of this technology by third parties. Public policy developed in the area of new genetic technology must reflect such interests.     

Information,reflection, and successful job search: A labor market policy experiment

Jobseekers, especially young people with little experience on the job market, face several challenges. They need to know which jobs are suited for them, where to find them, how to apply, and they need resilience in the face of repeated rejections. Previous research has shown that receiving information and reflecting on how to search for a job enhance self-efficacy and search motivation, thereby reducing the duration of unemployment spells. Following up on these results, we conducted an experiment in cooperation with the Austrian Ministry of Social Affairs which combines an “information nudge” in the form of a short video-clip with what we call “reflection nudge” in the form of an online survey. We find that a treatment combining reflection and information reduces job search duration of young unemployed people with a low level of formal education. Considering the low costs of the intervention, efficiency is very high.     

Viet Nam: The development of national health insurance

Since 1987, Viet Nam has been moving from a centrally planned to a market economy. The public sector became weaker, and public resources were no longer sufficient to respond to all healthcare needs. The government then recognized the need for cost-sharing, and in August 1992 issued a national Health Insurance Decree calling for compulsory health insurance for salaried workers in both the public and private sectors. Voluntary membership for dependants, farmers and the self-employed was also encouraged from the start. Currently, the number of insured persons reaches almost 9.5 million. Future challenges include the extension of coverage, especially to the low-income rural and urban population, modification of provider payment methods so as to enhance cost-containment, and organizational development in general.     

Single-year and multi-year insurance policies in a competitive market

This paper examines the demand and supply of annual and multi-year insurance contracts with respect to protection against a catastrophic risk in a competitive market. Insurers who offer annual policies can cancel policies at the end of each year and change the premium in the following year. Multi-year insurance has a fixed annual price for each year and no cancellations are permitted at the end of any given year. Homeowners are identical with respect to their exposure to the hazard. Each homeowner determines whether or not to purchase an annual or multi-year contract so as to maximize her expected utility. The competitive equilibrium consists of a set of prices where homeowners who are not very risk averse decide to be uninsured. Other individuals demand either single-year or multi-year policies depending on their degree of risk aversion and the premiums charged by insurers for each type of policy.     

The impact of social security reform on the labor market: The case of Colombia

This paper simulates the effects of three increasingly bolder reforms in the Colombian social protection system: the equalization of salaried and self-employed labor contributions; the removal of payroll taxes, parafiscales; and the complete delinking of social protection benefits from labor status. We collect nationally representative information concerning individual willingness to pay for several packages of social security benefits; identify and quantify – for the first time – three specific distortions caused by existing social security and social assistance systems; and simulate the gains that social protection reforms would bring about in terms of reduced labor distortions. We find that workers in Colombia, regardless of occupation, have a very similar willingness to pay for the full insurance package – below 20% of their labor earnings – and very similar valuation of social protection services – about 50% below par. Labor distortions are large, as expected from very high labor costs, but we quantify an implicit formality tax and informality subsidy ranging between 2 and 27 percent of different representative workers’ earnings. Critically, the long-discussed reforms in Colombia – including the elimination of parafiscales – will not reduce substantially the multiple distortions in its labor market.     

Ethno-religious identities and persisting penalties in the UK labor market

Most studies of minority group penalties in the UK labor market have focused on groups classified by their self-assessed ethnicity only, without taking into account major divisions within such groups, notably by religion. Using a large sample taken from the quarterly Labor Force Survey, this paper analyze levels of both unemployment and obtaining posts within the salariat for fourteen separate ethno-religious groups. Estimates of both gross and net penalties are derived, the latter taking the individuals’ human capital resources into account. They show that most non-White groups face an employment penalty, but Muslim groups – both men and women – experienced the greatest penalties. These penalties are exacerbated when searching for any job turns into searching for a managerial or a professional job suggesting that inequality is preserved through mechanisms of color and cultural racism which intensifies as minority workers seek jobs at the more lucrative end of the labor market – which, if persistent, could have long-term implications for the cohesion of the UK's multi-ethnic, multi-cultural society.     

Governing universal health insurance in Korea and Taiwan

This article examines policy responses to the rising costs of healthcare in the Republic of Korea and Taiwan from a governance perspective. It tries to answer why the two countries responded differently to a similar set of challenges facing their National Health Insurance (NHI). While Taiwan – in an attempt to contain costs – introduced a global budgeting system, Korea failed to do so. Governments in both countries attempted to establish a new mode of governance, bringing multiple stakeholders to health policy making in order to build social consensus. But the Korean government, as this article shows, could not resolve its policy deadlock because of a loss of trust between the government and the medical profession, caused by the separation reform of 2001. Even though Taiwan was better able than Korea to address the financial challenges of its NHI, the new mode of health governance is still on shaky ground. This article argues that because neither government now enjoys the exclusive power over health policy that they once did under the developmental state, it is essential to find a way in which different stakeholders can make the necessary compromises that will enable the NHI to run on a sustainable path for the future.     

Unemployment insurance in Bulgaria and other East European countries: The transition to a market economy

Unemployment places those it affects in a situation of dependency on unemployment benefits. The regulation of that dependency and the measures necessary to avert it, in Bulgaria (and also in other East European countries) during the period of transition to a market economy, forms the subject of labour and social insurance legislation relating to unemployment and introduced on a temporary basis. Unemployment insurance benefits (unemployment benefits in cash, unemployment assistance, social assistance) are provided for limited periods fixed in the light of the nature of the benefit, the causes of unemployment, the number of years of service, age, gender and other factors. The degree of dependency of unemployed persons on such benefits is also determined by the level of those benefits. The principal categories of legal instruments by which that dependency can be averted or reduced are (1) contributions by the State to the establishment of labour law relationships by providing information to unemployed persons on job vacancies, vocational training and retraining measures, job creation measures and placement; (2) incentives to employers to maintain existing jobs and to create new ones (credits, exemption from interest payments, etc.).     

China's health insurance system in transformation: Preliminary assessment, and policy suggestions

As long ago as the 1980s, in tandem with its gradual implementation of market economy reforms, the Chinese central government also began to introduce changes in the field of social security as part of a move away from the dominant principle of state provision towards a greater espousal of the insurance principle. For demographic reasons, but also in an effort to get the private sector to pay a greater share of the cost, the intention was that future social security should be shaped in a way which combined universal, pay-as-you-go basic provision with individually funded supplementary provision. While the first half of the 1990s saw the establishment of a broadly uniform system of basic pensions, the 1998 attempt to introduce a general system of basic health insurance has not yet proved comprehensively successful, even for the population of the towns and cities, despite the success of pilot projects. This article, based on wide-ranging field studies, seeks to assess progress to date and future prospects for success, from a Chinese and an international perspective. Consideration is given to the situation of both the urban and rural populations.     

The impact of health insurance cost-sharing method on healthcare utilisation in China

In current Chinese health insurance programmes, there are two types of cost-sharing methods: the time-of-service copayment policy and the reimbursement policy. In contrast to the copayment participants, reimbursement participants need to pay for all medical expenses in advance. We study the effect of the reimbursement policy on the utilisation of healthcare services in China. The theoretical analysis indicates that the medical consumption of low income households will be less than the optimal consumption level when enrolled in a reimbursement programme instead of a copayment programme. Empirically, using data from the China Health and Retirement Longitudinal Study (CHARLS), we find that the total inpatient expenditure of the reimbursement participants is 12.7% lower than that of copayment enrolees, and the reimbursement arrangement negatively impacts low-income and rural populations. Therefore, reimbursement participants, those who are financially constrained, are more likely to suffer the up-front payment burden and finally reduce their healthcare needs.     

对北京医疗基本保险制度的思考

北京医疗基本保险制度 ,具有强制性、有限性、垄断性和倾斜性等显著特征 ,是一种在较低水平运行的“基本”保险 ;在北京抗击“非典”的第一至第三阶段 ,对已经参保的健康群体没有发挥作用。它需要解决如何适应突发公共卫生事件、体现“预防为主”方针和提高人们对它的认知程度的问题。其发展方向应是市场化。     

Risk,ambiguity, and insurance

In a series of experiments, economically sophisticated subjects, including professional actuaries, priced insurance both as consumers and as firms under conditions of ambiguity. Findings support implications of the Einhorn-Hogarth ambiguity model: (1) For low probability-of-loss events, prices of both consumers and firms indicated aversion to ambiguity; (2) As probabilities of losses increased, aversion to ambiguity decreased, with consumers exhibiting ambiguity preference for high probability-of-loss events; and (3) Firms showed greater aversion to ambiguity than consumers. The results are shown to be incompatible with traditional economic analysis of insurance markets and are discussed with respect to the effects of ambiguity on the supply and demand for insurance.University of Chicago Graduate School of BusinessUniversity of Pennsylvania The Wharton School     

The modest effects of fact boxes on cancer screening

Journal of Risk and Uncertainty - As health care becomes increasingly personalized to the needs and values of individual patients, informational interventions that aim to inform and debias consumer...