how does health insurance affect workers compensation filing i introduction workers compensation serves as a near universal health insurance system for workers who become sick or injured because of their job almost every private sector worker in the united states is covered by workers compensation which typically provides full reimbursement for medical expenditures and partial reimbursement for wage losses incurred as a result of a workplace injury or illness 1 given that employer provided health insurance usually involves cost sharing for medical expenditures and offers no income replacement one would expect workers to seek compensation for nearly all workplace health conditions however it appears that many injured workers elect not to participate in workers compensation using data from a survey of workers in michigan biddle and roberts 2003 found that just 55 1 of the workers with lost time reported filing for any workers compensation benefits and just 39 1 reported filing for wage replacement this suggests that workers may not view workers compensation filing as free for example workers might lack information about the availability or even the existence of workers compensation benefits employers might discourage participation and there could be a stigma associated with filing for benefits additionally a worker might be uncertain about his or her ability to prove that an injury or an illness is work related as a result pursuing a workers compensation claim could require that a worker spend money on healthcare consultations upfront with uncertain prospects for reimbursement while any of these costs could lead a worker not to file a claim the magnitude of nonparticipation is still surprising the existence of alternatives to workers compensation specifically health insurance is often thought to exacerbate nonparticipation injured workers may be unwilling to bear workers compensation filing costs if their health insurance reduces or eliminates the burden of medical costs moreover individuals without health insurance have greater incentive to pass off nonoccupational injuries or illnesses as work related if the possession of health insurance explained nonparticipation there would be fewer normative concerns that poor participation imperils the health of injured workers however a look at data on health insurance and workers compensation filing from the national longitudinal survey of youth nlsy reported in table 1 calls the conventional wisdom into question the first two columns of the table show that injured workers without health insurance are 7 percentage points about 13 less likely to file a claim than those with health coverage 2 this is in spite of the fact that uninsured workers are more likely to have lost wages and missed more days of work as a result of their injuries this result is puzzling given the argument above that the uninsured worker should be more likely to file the last two columns of the table add nuance to this picture showing that the gap in filing widens substantially when we compare workers in firms that do and do not offer health insurance workers in insuring firms are 16 percentage points more likely to file a claim even though their injuries are still less severe in terms of lost wages and work time it would appear that the effects of health insurance on workers compensation claiming are not as straightforward as they might appear and may have more to do with the characteristics of employers who offer health insurance than with the incentives faced by the workers this table illustrates a result that we confirm in this study actual health insurance coverage itself is much less important than whether an employer offers health insurance we found that injured workers are more likely to file claims when they work for an employer who offers health insurance this result holds even when we incorporate worker fixed effects and other control variables suggesting that the characteristics of the employer are not simply proxies for unobserved worker characteristics

evolving choice inconsistencies in choice of prescription drug insurance we study choice over prescription insurance plans by the elderly using government administrative data to evaluate how these choices evolve over time we find large foregone savings from not choosing the lowest cost plan that has grown over time we develop a structural framework to decompose the changes in foregone welfare from inconsistent choices into choice set changes and choice function changes from a fixed choice set we find that foregone welfare increases over time due primarily to changes in plan characteristics such as premiums and out of pocket costs we estimate little learning at either the individual or cohort level

evaluating the food and agriculture act of 1977 with firm quadratic risk programming federal agricultural commodity programs generally have been assumed to reduce the income risk for farm firms but limited empirical research exists on this proposition this paper presents a study of the impact of the food and agriculture act of 1977on income risk for a representative farm in georgia the model is used to derive an e v frontier for a firm not participating in the program and for the same firm that is participating in the program results indicate that participation dominates nonparticipation except for higher level of expected net income

the effect of patient cost sharing on utilization health and risk protection abstract this paper exploits a sharp reduction in patient cost sharing at age 70 in japan using a regression discontinuity design to examine its effect on utilization health and financial risk arising from out of pocket expenditures due to the national policy cost sharing is 60 80 percent lower at age 70 than at age 69 i find that both outpatient and inpatient care are price sensitive among the elderly while i find little impact on mortality and other health outcomes the results show that reduced cost sharing is associated with lower out of pocket expenditures especially at the right tail of the distribution jel g22 i11 i12 i13 i18 j14

poverty consumption risk and soil conservation abstract this paper studies the impact of poverty and uninsured consumption risk on incentives to invest in soil conservation a stochastic dynamic model is used to show how consumption risks and costs of investment influence incentives to adopt soil conservation measures on low income farms the model is calibrated using production data from hillside farms in the philippines simulations with the model demonstrate how the value of soil conservation depends on the cost of investing the risk characteristics of the soil conservation method and differences among households in capacity to bear risk model predictions are compared with empirical adoption patterns as described by a probit model and nonparametric kernel regressions of adoption probability empirical findings show how differences in farm size tenure security risk exposure and access to credit help to explain patterns of soil conservation adoption implications for policy are discussed

fiscal implications of effluent charges and input taxes abstract taxing inputs that cause pollution is an alternative to effluent fees the literature has identified an economic relationship between these two market approaches that results in equivalent emission reductions however the fiscal implications of each approach may differ considerably this investigation shows total revenues collected from polluters under each instrument are identical only if the production of residuals exhibits constant returns to scale empirical estimates of the difference in revenues collected are presented for the case of deep percolated nitrate losses in irrigated agriculture

health insurance and the demand for medical care instrumental variable estimates using health insurer claims data this paper takes a different approach to estimating demand for medical care that uses the negotiated prices between insurers and providers as an instrument the instrument is viewed as a textbook cost shifting instrument that impacts plan offerings but is unobserved by consumers the paper finds a price elasticity of demand of around 0 20 matching the elasticity found in the rand health insurance experiment the paper also studies within market variation in demand for prescription drugs and other medical care services and obtains comparable price elasticity estimates

dominated choices and medicare advantage enrollment research in behavioral economics suggests that certain circumstances such as large numbers of complex options or revisiting prior choices can lead to decision errors this paper explores the enrollment decisions of medicare beneficiaries in the medicare advantage ma program during the time period we study 2007 2010 private fee for service pffs plans offered enhanced benefits beyond those of traditional medicare tm without any restrictions on physician networks making tm a dominated choice relative to pffs yet more than three quarters of medicare beneficiaries remained in tm during our study period we analyze the role of status quo bias in explaining this pattern of enrollment our results suggest that status quo bias plays an important role the rate of ma enrollment was significantly higher among new medicare beneficiaries than among incumbents these results illustrate the importance of the choice environment that is in place when enrollees first enter the medicare program

saving babies revisiting the effect of very low birth weight classification we reconsider the effect of very low birth weight classification on infant mortality we demonstrate that the estimates are highly sensitive to the exclusion of observations in the immediate vicinity of the 1 500 g threshold weakening the confidence in the results originally reported in almond doyle kowalski and williams 2010

administrative costs and instrument choice for stochastic non point source pollutants this paper extends the empiricalanalysis of non point source pollution to thecase where the pollutant is stochastic andalternative regulatory instruments havedifferent administrative costs it also appliesa method of stochastic programming whereemissions are log normally distributed forthe kennet catchment in south west england werank a range of policies in terms of abatementcosts alone and total costs abatement andadministrative costs on the basis ofabatement costs alone a uniform emission taxis the cost minimising policy but on the basisof total cost a nitrogen input tax is theleast cost policy furthermore the policyranking based on total costs changes as thereliability standard increases

the impact of patient cost sharing on low income populations evidence from massachusetts greater patient cost sharing could help reduce the fiscal pressures associated with insurance expansion by reducing the scope for moral hazard but it is possible that low income recipients are unable to cut back on utilization wisely and that as a result higher cost sharing will lead to worse health and higher downstream costs through increased use of inpatient and outpatient care we use exogenous variation in the copayments faced by low income enrollees in the massachusetts commonwealth care program to study these effects we estimate separate price elasticities of demand by type of service overall we find price elasticities of about 0 16 for this low income population similar to elasticities calculated for higher income populations in other settings these elasticities are somewhat smaller for the chronically sick especially for those with asthma diabetes and high cholesterol these lower elasticities are attributable to lower responsiveness to prices across all categories of service and to some statistically insignificant increases in inpatient care

california s 2004 workers compensation reform costs claims and contingent workers the large excess fraction of difficult to diagnose injuries that occur on a monday was originally thought to reflect employees use of workers compensation to cover weekend injuries evidence has

the price of virtue this article offers new evidence on the determinants of u s unwed birth rates from 1981 to 1990 we show that illegitimacy rates are positively and significantly correlated with payments under the aid to families with dependent children program over a period in which real afdc payments declined we attribute this result to a decline in the social sanctions for illegitimacy because social sanctions declined so did the cost of deviance as well as the price for which unwed women sold their virtue

agricultural runoff as a nonpoint externality a theoretical development the purpose of this paper is to develop and explore a theory dealing with an important facet of agricultural runoff problems agricultural runoff is a nonpoint externality with notable implications for both research and policy a nonpoint externality exists whenever the externality contributions of individual economic agents cannot be practically measured by direct monitoring without monitoring regulations on emissions cannot be enforced and charges or subsidies cannot be assessed thus policies which are usually suggested for pollution abatement are not available there is great need for a theoretical base that can adequately capture these facts such a theory yields some important implications even before specific empirical applications the economic problem of agricultural runoff can be separated into three distinct categories first the sediment nutrients and chemicals removed by runoff represent a loss of resources to the individual farmer these costs are borne privately by farmers second if the discount rate of the individual farmer is greater than the social discount rate or if the farmer has a planning horizon which is shorter than society s the farmer will mine the soil resource at a rate which is more depletive than is socially optimal this is a temporal externality a third category involves the conservation of mass physical resources lost by the individual farm must appear elsewhere in the environment in sufficient quantities these resources are pollutants since water is the primary transport media for these resources it is water that is polluted by soil nutrients and agricultural chemicals this spatial externality has been the focus of much research here we intend to develop a theory for these issues to employ it to suggest a revised research methodology and to provide some important conclusions about alternative runoff policies only two of the three categories of agricultural runoff problems involve externalities and only the spatial externality is considered here

health insurance and the demand for medical care evidence from a randomized experiment we estimate how cost sharing the portion of the bill the patient pays affects the demand for medical services the data come from a randomized experiment a catastrophic insurance plan reduces expenditures 31 percent relative to zero out of pocket price the price elasticity is approximately 0 2 we reject the hypothesis that less favorable coverage of outpatient services increases total expenditure for example by deterring preventive care or inducing hospitalization

soil conservation with uncertain revenues and input supplies shortle and stefanou provide a conceptual extension of the single period static generalized meanvariance model gmvm to the multiperiod dynamic case in doing so they illustrate the linkage between the selection of activities in the first period to production opportunities in the second and by extension subsequent time periods in the context of analyzing the adoption of soil loss control practices they correctly argue that the static model employed in our analysis ignores any benefits that adopting these practices might have on future production opportunities their criticisms however are essentially no different than those levied against static models used in other types of analyses regardless of the type of risk attitudes attributed to the representative decision maker that is their comments hold equally well for risk neutral static models of soil conservation behavior the purpose of our work however was to demonstrate the effects of uncertainty and risk aversion on the selection of crop and soil loss control activities as compared to the risk neutral case our purpose was not to analyze the time path of bmp adoption or erosion although we agree that this is an interesting research topic in the context of our

methodological aspects of a mathematical programming model to evaluate soil tillage technologies in a risky environment abstract in this work we develop a methodology for the economic evaluation of soil tillage technologies in a risky environment and to capture the influence of farmer behaviour on his technology choice the model has short term activities that change with the type of year and long term activities in which sets of traction investment activities are included although these activities do not change with the type of year they lead to different availability of resources for each type of year since the same tractor has different available fieldwork days under different weather conditions we prove that the model is sensitive to the greater income variability resulting from the use of alternative technologies and to the balance between income and risk accounting for the probability of occurrence of each state of nature and giving an investment solution that considers the best production plan for each type of year

health insurance for humans information frictions plan choice and consumer welfare traditional models of insurance choice are predicated on fully informed and rational consumers protecting themselves from exposure to financial risk in practice choosing an insurance plan is a complicated decision often made without full information in this paper we combine new administrative data on health plan choices and claims with unique survey data on consumer information to identify risk preferences information frictions and hassle costs our additional friction measures are important predictors of choices and meaningfully impact risk preference estimates we study the implications of counterfactual insurance allocations to illustrate the importance of distinguishing between these micro foundations for welfare analysis

the impact of controlled foreign company legislation on real investments abroad a multi dimensional regression discontinuity design controlled foreign company cfc rules are frequently imposed by countries as part of their anti tax avoidance legislation this paper aims at quantifying the impact of the german cfc rule on the universe of foreign investments held by german multinational firms the german cfc legislation gives rise to a multi dimensional regression discontinuity design which allows us to estimate local average treatment effects along the dimensions determining treatment our results suggest a significant and economically large impact of the cfc legislation on multinationals real activity abroad we also find evidence of some heterogeneity in estimated treatment effects according to parametric as well as nonparametric estimates

what happens when the insurer can say no assessing prior authorization as a tool to prevent high risk prescriptions and to lower costs abstract insurers are increasingly requiring physicians to obtain prior authorization before prescribing drugs that are costly or have high abuse potential these prior authorization requirements have the potential to reduce risky prescriptions and to lower prescription drug costs but little is known about their ability to do either this study estimates the effect of a prior authorization requirement for certain costly and abuse prone drugs on prescription drug use and costs for work related injuries in texas the findings indicate that the prior authorization requirement reduces the likelihood that claimants receive non preferred drugs as well as insurers spending on non preferred drugs while there is some substitution to preferred drugs i do not find evidence of large increases in spending on preferred drugs the estimated effects on average total pharmacy spending are imprecise though there is suggestive evidence that the prior authorization requirement reduces the likelihood that a claim has high prescription drug costs the results provide strong evidence that the prior authorization requirement drastically reduces the likelihood that patients receive combinations of drugs that have contributed disproportionately to the rise in prescription drug overdoses despite the success of prior authorization in lowering spending on non preferred drugs and in reducing high risk prescriptions i find little evidence that prior authorization has disproportionately large effects on the most dangerous prescription drug use and only weak suggestive evidence that it has larger effects on prescription drug use that likely arises because physicians are not fully informed suggesting that prior authorization requirements do not necessarily target the riskiest drug use

the economic implications of disability insurance in canada the article empirically estimates the effects of disability pensions provided under the canada quebec pension plans on the labor force participation rates of males aged 45 64 years two data sets are used one consists of pooled cross section annual time series data by province for the years 1975 83 the other consists of observations as of 1985 on 651 males in the specified age group naive estimation results from both sets of data suggest a large negative effect of pension income in the case of the micro data this effect becomes small and statistically nonsignificant when more sophisticated estimation methods are used

welfare and the family the canadian experience canada has a universal social assistance program that is almost completely administered through the federal canada assistance program however provinces determine the levels of assistance for various groups eligible for welfare this article exploits the variation in payments and uses microdata to estimate the effect of changes in welfare benefits on welfare participation single parenthood births out of wedlock divorce and labor force participation among low income women in canada it would appear that welfare benefits influence these decisions

comments on danzon maki murray and allen the two studies on disability by patricia danzon and dennis maki nicely complement each other danzon provides a very fine theoretical analysis of the effects of disability insurance while maki s is a good empirical study of the canadian experience why are governments so extensively involved in disability programs two very different explanations are 1 that governments offset failures in the private insurance market or 2 that government disability programs redistribute resources to some groups at the expense of others some analysts claim that private insurance markets do not work well because of the difficulties in handling self selection and moral hazard empirical studies in both the united states and canada typically find that public disability programs significantly reduce labor force participation rates for example maki finds that about a third of the reduction in participation rates of canadian males aged 45 64 in recent years is due to disability programs sizable effects are also found with u s data although danzon shows the large unexplained differences in estimates from different studies she states it is often implicitly assumed that all reduction in labor supply associated with disability insurance is moral hazard and entails an excess burden p s188 her theoretical analysis helps evaluate this implicit assumption for she shows that an optimal first best disability program might well reduce labor supply relative to a world with no insurance even when there is full information about disabilities indeed she shows more than this that under certain conditions with first best insurance the insuree is better off by suffering a disability than not insurees then have a strong incentive to fake disabilities it is not yet possible to evaluate how much of the reduction in labor supply in either canada or the united states is due to redistributive aspects

endogenous risk and point nonpoint uncertainty trading ratios point nonpoint trading enables highly uncertain nonpoint pollution abatement to be substituted for relatively certain point source pollution abatement market designers use uncertainty trade ratios to address imperfect substitution between these commodities guidance from government agencies and other entities recommends large ratios that penalize trades for nonpoint abatement and extant programs universally implement this guidance previous research has shown that the standard guidance is based on an inappropriate framing of the risk effects of substituting nonpoint for point source pollution abatement and has demonstrated that the trade ratios should be set to encourage or discourage substitution depending on whether the substitution is risk reducing or risk increasing however the pigouvian pricing approach used to develop this result obscures the underlying economic calculus because it does not recognize or characterize the tradeoffs between abatement costs savings and environmental risk that must be considered in an economic evaluation of alternative ratios and that would be key to explaining why ratios recommended by economic analysis would be preferred to received wisdom we develop a new approach that explicitly identifies and characterizes the tradeoffs associated with the choice of ratio the approach is examined both in first best settings where trade ratios and initial permit allocations are jointly determined and in second best settings where permit allocations are taken as given we provide a numerical analysis of trading in the susquehanna river basin in pennsylvania to illustrate theory we find theoretical and numerical support suggesting that smaller ratios may be optimal

when subsidies for pollution abatement increase total emissions in a first best deterministic world it is well known 2 28 30 that a unit tax on emissions equal to marginal damage is an efficient mechanism for internalizing the damages caused by polluting firms a unit subsidy for emissions abated also equal to marginal pollution damage has the same desirable property but only in the short run in the long run such subsidies induce polluting firms to operate at too small a scale and attract an excessive number of new firms to the polluting industry this can have the perverse result that there are more emissions when abatement is subsidized than when it is not nevertheless economists have been reluctant to give up entirely on the subsidy approach recognizing with oates 23 290 that polluters will obviously be far more receptive to measures that assist with the costs of pollution control than to those that place the burden upon themselves it is therefore not surprising that economists have continued to look for and find new justifications for subsidizing pollution control thus mestelman 20 187 argues that the subsidy scheme may be a second best alternative for externality control when the direct taxation alternative is not politically viable mchugh 17 64 shows that subsidies for pollution abatement expenditures can be a useful instrument in the case of cost increasing technological innovations harford 6 demonstrates that subsidies for pollution control inputs may be efficient when enforcement is sufficiently costly harford 7 makes still another argument for subsidies in the case in which the day to day performance of abatement equipment is uncertain but the uncertainty can be reduced by maintenance expenditures finally there are schemes for combining subsidies and taxes 14 26 given the continuing interest in subsidies it is important to examine carefully the disturbing case in which subsidies increase rather than decrease total emissions

social assistance and conjugal union dissolution in canada a dynamic analysis using statistics canadas general social survey on family and friends carried out in 1990 we piece together the matrimonial and conjugal life history of a large sample of canadian men and women we then estimate duration models coxs proportional hazard models describing the evolutionary laws of marriages and unions which depend on various economic or socio demographic explanatory variables the empirical modelling focuses primarily on estimating the impact of couples earned incomes and of provincial welfare programs on the dissolution rate of first marriages and unions we find that welfare benefits do not have an impact on the hazard of union dissolution and that earned incomes have a positive effect on conjugal stability excerpt summary in fre

patient cost sharing and hospitalization offsets in the elderly in the medicare program increases in cost sharing by a supplemental insurer can exert financial externalities we study a policy change that raised patient cost sharing for the supplemental insurer for retired public employees in california we find that physician visits and prescription drug usage have elasticities that are similar to those of the rand health insurance experiment hie unlike the hie however we find substantial offset effects in terms of increased hospital utilization the savings from increased cost sharing accrue mostly to the supplemental insurer while the costs of increased hospitalization accrue mostly to medicare

revenue and cost uncertainty generalized mean variance and the linear complementarity problem comment in articles including one in this journal quirino paris 1978 1979 adapted the symmetric quadratic programming structure of cottle to handle limiting stochastic inputs in a way analogous to stochastic revenues within the last decade several researchers have employed the method kramer mcsweeny and stavros kms mcsweeny and kramer and mcsweeny applied this method to soil conservation decisions in the presence of both output price and input availability risk shortle and stefanou recently extended the method to include dynamics for soil conservation decisions paris and easter easter and paris and easter used a further result of this method to make the application of chance constraints to asymmetric quadratic meanvariance analysis more manageable paris s technique deals with inputs with uncertain availabilities such as field hours kms ground water for irrigation paris 1979 family labor paris 1978 and rainfall these inputs are not readily traded on an open market and their availability is difficult to supplement with additional purchases inputs with uncertain availability may be viewed as inputs that were endowed prior to production but yield an uncertain flow of services during the production period in most agricultural settings these inputs are possible limits to production paris s technique represents an effort to incorporate the uncertainty of these input supplies into the optimal planning model concerns about paris s method have been raised for example see mccarl or falatoonzadeh conner and pope this comment examines the appropriateness of the risk adjustment term for the stochastic inputs in paris s constraint and shows this term is inappropriately signed this will be established for a single stochastic input model for the general model and by a comparison to chance constraints the single stochastic input case

the impact of marketing systems on soil sustainability of agriculture in developing countries a method and an application this article is concerned with soil sustainability problems of agriculture in developing countries in particular with soil erosion the aim of our study is to develop a comprehensive model that explains the adoption of sustainable agricultural practices with respect to soil conservation our approach includes the following special features a the model is comprehensive in that it includes a large number of institutional personal social economic and physical explanatory variables b particular attention is paid to the influence of marketing systems on the adoption of sustainable agricultural practices which to our knowledge has been neglected in past research c the concept of adopting sustainable agricultural practices asap is differentiated into a limited number of basic components of soil conservation and d the model is estimated by principal component regression which enhances efficient estimation of the impact of many explanatory variables on asap our model is applied to cabuyal hillside farming in colombia the application demonstrates the usefulness of the proposed model asap is differentiated into three basic components soil disturbance control soil protection practices and run off control it appears that soil disturbance control is particularly influenced by farmers characteristics such as education and managerial variables the second component soil protection practices appears to be strongly influenced not only by farmers managerial variables but also by their relationship with their environment in particular marketing institutions the third soil conservation component run off control is influenced by the physical characteristics of the plot and by the available farm labor our empirical results demonstrate the usefulness of the proposed model in designing agricultural policies because it can determine which variables are more likely to influence the adoption of a specific type of soil conservation

on site economic evaluation of soil conservation practices in honduras abstract factors affecting the cost to the farmer of employing soil erosion reduction strategies are examined for the steep hillsides near tegucigalpa honduras linear programming and motad are used to examine these factors results indicate that some modest reductions in erosion can be achieved at little cost to the farmer by reorganizing production switching rotations and using contour plowing these modest reductions still lead to extremely high rates of erosion sharper reductions may be achieved at progressively higher costs as erosion control structures are constructed and acreage is left fallow there is a high cost to the farmer of reducing erosion to sustainable levels a consistent tradeoff emerges between levels of soil conservation income and risk erosion reduction efforts lead to lower incomes and higher risk the analysis of likely benefits to farmers for erosion reduction shows that even under assumptions of very high yield losses from soil erosion optimal farm plans still lead to high rates of soil loss implying a need for policies that internalize externalities if off farm damages are to be minimized

the decision to double crop an application of expected utility theory using stein s theorem a nonlinear single equation acreage allocation model derived from expected utility theory using stein s theorem for covariance decomposition is developed this decomposition allows the covariance of utility parameters and revenues to be expressed in terms of measurable variables the model is applied to state level data to estimate the relative importance of various economic factors in determining the pattern of double cropping wheat and soybeans in the southeastern united states the hypothesis that the riskiness of returns is important in the aggregate is rejected for some of the states although the constrained expected utility model without the effect of risk performs better than a standard wheat acreage response model