EconPapers    
Economics at your fingertips  
 

Health-Related Life Cycle Risks and Public Insurance

Daniel Kemptner ()

No 1320, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: This paper proposes a dynamic life cycle model of health risks, employment, early retirement, and wealth accumulation in order to analyze the health-related risks of consumption and old age poverty. In particular, the model includes a health process, the interaction between health and employment risks, and an explicit modeling of the German public insurance schemes. I rely on a dynamic programming discrete choice framework and estimate the model using data from the German Socio-Economic Panel. I quantify the health-related life cycle risks by simulating scenarios where health shocks do or do not occur at different points in the life cycle for individuals with differing endowments. Moreover, a policy simulation investigates minimum pension benefits as an insurance against old age poverty. While such a reform raises a concern about an increase in abuse of the early retirement option, the simulations indicate that a means test mitigates the moral hazard problem substantially.

Keywords: Dynamic programming; discrete choice; health; employment; early retirement; consumption; tax and transfer system (search for similar items in EconPapers)
JEL-codes: C61 I14 J22 J26 (search for similar items in EconPapers)
Pages: 36 p.
Date: 2013
New Economics Papers: this item is included in nep-age, nep-cmp, nep-dem, nep-dge, nep-hea and nep-ias
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.diw.de/documents/publikationen/73/diw_01.c.426032.de/dp1320.pdf (application/pdf)

Related works:
Journal Article: Health-related life cycle risks and public insurance (2019) Downloads
Working Paper: Health-Related Life Cycle Risks and Public Insurance (2013) Downloads
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: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp1320

Access Statistics for this paper

More papers in Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Bibliothek ().

 
Page updated 2024-05-22
Handle: RePEc:diw:diwwpp:dp1320