Social Insurance and Redistribution with Moral Hazard and Adverse Selection

Robin Boadway (), Manuel Leite-Monteiro (), Maurice G. Marchand and Pierre Pestieau ()

No 4253, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This Paper starts from the result of Rochet (1989), that with distortionary income taxes social insurance is a desirable redistributive device when risk and ability are negatively correlated. This finding is re-examined when ex post moral hazard and adverse selection are included, and under different informational assumptions. Individuals can take actions influencing the size of the loss in the event of accident (or ill health). Social insurance can be supplemented by private insurance, but private insurance markets are affected by both adverse selection and moral hazard. The main purpose of the present Paper is to study how equity and efficiency considerations should be traded off in choosing the optimal coverage of social insurance when those features are introduced.

Keywords: market failures; redistribution; social insurance (search for similar items in EconPapers)
JEL-codes: H23 H51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe and nep-pub
Date: 2004-02
View list of references View citations in EconPapers

Downloads: (external link)
http://www.cepr.org/pubs/dps/DP4253.asp (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Social insurance and redistribution with moral hazard and adverse selection (2004)
Journal Article: Social Insurance and Redistribution with Moral Hazard and Adverse Selection (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:cpr:ceprdp:4253

Ordering information: This working paper can be ordered from
http://www.cepr.org/pubs/dps/DP4253.asp

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers
Address: Centre for Economic Policy Research, 53--56 Great Sutton Street, London EC1V 0DG
Series data maintained by ().