Health insurance and precautionary saving: A structural analysis

Hsu, Minchung

doi:10.1016/j.red.2012.09.001

Cited by 24 publications

(16 citation statements)

References 24 publications

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“…23 The discount factor β is set to 0.9996 to match the aggregate capital output ratio of 2.7. 24 We set the labor supply of those who choose to work (l) to 0.4 Fixed leisure costs of work ϕ w are calibrated to match the employment profiles for 22 Given that we have indivisible labor supply we cannot pin down this parameter using a moment in the data. 23 The relative risk aversion over consumption is given by −cu cc /u c = 1 − χ(1 − σ).…”

Section: Demographics Preferences and Technologymentioning

confidence: 99%

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Work Incentives of Medicaid Beneficiaries and the Role of Asset Testing

Pashchenko¹,

Porapakkarm

2013

SSRN Journal

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Having low income is one of the requirements for Medicaid eligibility. Given that earning ability is unobservable, once an individual with high labor income stops working it is impossible to distinguish him from those whose potential labor income is low. This can affect the ability of Medicaid to target the most disadvantaged people given that a large fraction of its beneficiaries do not work. In this paper we ask two questions: 1) Does Medicaid significantly distort work incentives? 2) Can the insurance-incentives trade-off of Medicaid be improved without changing the size of the redistribution in the economy? Our tool is a general equilibrium model with heterogeneous agents calibrated using the Medical Expenditure Panel Survey Dataset to match the life-cycle patterns of employment and insurance take-up behavior as well as the key aggregate statistics. We find that around 20% of Medicaid enrollees do not work in order to be eligible. These distortions are costly for the economy: if Medicaid eligibility could be linked to (unobservable) productivity the resulting ex-ante welfare gains are equivalent to 1.5% of the annual consumption. We show that asset testing can achieve a similar outcome but only if asset limits are allowed to be different for workers and non-workers.

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Section: Demographics Preferences and Technologymentioning

confidence: 99%

“…23 The relative risk aversion over consumption is given by −cu cc /u c = 1 − χ(1 − σ). 24 From 2001 to 2011 the ratio of private fixed assets plus consumer durable to GDP ranged from 2.52 to 2.78 (Bureau of Economic Analysis).…”

Section: Demographics Preferences and Technologymentioning

confidence: 99%

Work Incentives of Medicaid Beneficiaries and the Role of Asset Testing

Pashchenko¹,

Porapakkarm

2013

SSRN Journal

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“…This study is closely related to studies on health insurance such as those by Jeske andHsu (2012), but differs by focusing on tax-based UHC and allowing workers to transition to different sectors, which causes efficiency and tax differences.…”

Section: Introductionmentioning

confidence: 99%

Impacts of Universal Health Coverage: Financing, Income Inequality, and Social Welfare

Huang

Yoshino

2016

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of ADBI, ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Working papers are subject to formal revision and correction before they are finalized and considered published.Asian Development Bank Institute Kasumigaseki Building, 8th Floor 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, JapanTel:+81-3-3593-5500 Fax:+81-3-3593-5571 URL:www.adbi.org E-mail: info@adbi.org AbstractThis paper studies the impact of tax-financed universal health coverage schemes on macroeconomic aspects of labor supply, asset holding, inequality, and welfare, while taking into account features common to developing economies, such as informal employment and tax avoidance, by constructing a dynamic stochastic general equilibrium model with heterogeneous agents. Agents have different education levels, employment statuses, and idiosyncratic shocks. Given three tax financing options, calibration results based on the Thai economy suggest that the financing options matter for outcomes both at the aggregate and disaggregate levels. Universal health coverage, financed by labor income tax revenue, could reduce inequality due to its large redistributive role. Social welfare cannot be improved when labor decisions are endogenous and distortions are higher than the redistributive gains for all tax financing options. In the absence of labor supply choice, mild welfare gains are found. In a broader sense, the paper aims to provide a frame for policy evaluation of socioeconomic policies from both macro and micro perspectives, taking different social groups into consideration.

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“…This study is closely related to studies on health insurance such as those by Jeske and Kitao (2009) and Hsu (2012), but differs by focusing on tax-based UHC and allowing workers to transition to different sectors, which causes efficiency and tax differences. 4 It is also related to studies of labor supply (and social security) such as Heckman (1993), Saez (2002), Imrohoroglu and Kitao (2009), and Kitao (2014).…”

mentioning

confidence: 99%