Three essays on social insurance

• Main Author: SUN, Jessica Ya
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2018
• Subjects: social insurance; NCMS; health insurance; Health Economics
• Online Access: https://ink.library.smu.edu.sg/etd_coll/304; https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1304&context=etd_coll
• Institution: Singapore Management University

This dissertation consists of three chapters on the economics of social insurance. Each chapter explores an aspect of the evaluation and design of social insurance in terms of nutrition, healthcare and unemployment. The first chapter, Kim, Fleisher and Sun (2016) report evidence of long-term adverse health impacts of fetal malnutrition exposure of middle-aged survivors of the 1959-1961 China Famine using data from the China Health and Retirement Longitudinal Study. We find that fetal exposure to malnutrition has large and long lasting impacts on both physical health and cognitive abilities, including the risks of suffering a stroke, physical disabilities in speech, walking and vision, and measures of mental acuity even half a century after a tragic event. Our findings imply that policies and programs that improve the nutritional status of pregnant women yield benefits on the health of a fetus that extend through the life cycle in the form of reduced physical and mental impairment. In Chapter 2, I evaluate the welfare benefits of the New Cooperative Medical Scheme (NCMS), the main public health insurance plan for the rural population in China. I find that the value of the NCMS to recipients is slightly higher than the government’s costs of implementation. Household benefits from the insurance through its value in transfer and insurance function. The estimated moral hazard costs are small compared to the total benefits. The findings suggest that behavioral changes due to health insurance (i.e. increase of medical service utilization) are in large welfare improving among low-income households. In Chapter 3, I examine the effect of a two-tiered unemployment insurance system, combining both the UISA and the current unemployment insurance. Unemployment insurance savings account (UISA) is a mandatory individual savings accounts that can be used only during unemployment or retirement. Different from unemployment insurance, UISA does not lead to moral hazard problem but also provide no public insurance to workers. Workers are mandated to save when employed and can withdraw from the account when unemployed. Once the account is exhausted, the unemployed worker receives the usual unemployment benefits. The two-tiered unemployment insurance works more efficiently than an unemployment insurance system since it provides government benefits only to individuals who are not capable of consumption smoothing themselves. Fitting the model to the US economy, I find that, relative to the existing unemployment insurance system, the proposed two-tiered unemployment insurance leads to a welfare gain of 1% and reduce unemployment duration for younger workers.