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Adverse selection and government intervention in life and health insurance markets

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dc.contributor.advisor James M. Poterba and Jonathan Gruber. en_US Finkelstein, Amy en_US
dc.contributor.other Massachusetts Institute of Technology. Dept. of Economics. en_US 2005-08-23T22:02:27Z 2005-08-23T22:02:27Z 2001 en_US 2001 en_US
dc.description Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2001. en_US
dc.description Includes bibliographical references (p. 142-143). en_US
dc.description.abstract This thesis examines the workings of insurance markets. The first two papers examine the effect of government tax and regulatory policy in markets for supplementary health insurance. The third paper presents new evidence of the importance of adverse selection in insurance markets. The first paper examines the empirical consequences of imposing binding minimum standards on the market for private health insurance for the elderly in the United States. I find robust evidence of a substantial (40 percent) decline in insurance coverage associated with imposing these minimum standards. The standards are also associated with a reduction in coverage of non-mandated benefits among the insured. The minimum standards therefore, while requiring additional insurance coverage among the insured, were also associated with both extensive and intensive declines in insurance coverage. Considering all of these various changes, I estimate that the standards were, on net, welfare reducing. The second paper presents new evidence of the effect of the tax subsidy to employer-provided health insurance on coverage by such insurance. en_US
dc.description.abstract (cont.) I study the effects of a 1993 tax change that reduced the tax subsidy to employer-provided supplementary health insurance in Quebec by over half. Using a differences-in-differences methodology in which changes in Quebec are compared with changes in other Canadian provinces not affected by the reform, I estimate an elasticity of employer coverage with respect to the tax price of -0.46 to -0.49. The tax subsidy appears much more critical to the provision of supplementary health insurance in small firms than in larger ones. The third paper, written jointly with James Poterba. re-examines the importance of adverse selection in insurance markets. We use a unique data set of all annuity policies sold by a large U.K. insurance company since the early 1980s to analyze mortality differences among individuals who purchased different types of policies. We find systematic relationships between ex-post mortality and annuity policy characteristics that are consistent with models of asymmetric information in insurance markets. We confirm that the pricing of features of annuity contracts is consistent with the self-selection patterns we find in mortality rates. en_US
dc.description.statementofresponsibility by Amy Nadya Finkelstein. en_US
dc.format.extent 151 p. en_US
dc.format.extent 17200960 bytes
dc.format.extent 17200721 bytes
dc.format.mimetype application/pdf
dc.format.mimetype application/pdf
dc.language.iso eng en_US
dc.publisher Massachusetts Institute of Technology en_US
dc.rights M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission. en_US
dc.subject Economics. en_US
dc.title Adverse selection and government intervention in life and health insurance markets en_US
dc.type Thesis en_US Ph.D. en_US
dc.contributor.department Massachusetts Institute of Technology. Dept. of Economics. en_US
dc.identifier.oclc 49621607 en_US

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