Non-Profit Hospitals, Tax Exemptions and Access for the Uninsured

These comments approach the topic of tax exemption for non-profit hospitals from the perspective of the 46 plus million Americans who have no health insurance and the significant additional number who are underinsured. In essence, persons who are underinsured have some form of health coverage but they remain at serious risk for significant out-of-pocket expenditures when they become sick. From this perspective, the key question is what role, if any, do the non-profit health care sector and, more particularly, non-profit hospitals have to play in addressing the vexing problems posed by the large number of uninsured and underinsured. These problems tend to be discussed primarily, although not exclusively, as problems of access. To put the question in specific terms: Is tax exemption for non-profit hospitals a tool that could be used effectively to address, or at least to help to address, these problems? Should we try to fashion tax exemption standards for non-profit hospitals into a tool for responding to some of the challenges posed by the growing number of uninsured in our society

Shocks, stocks and socks: consumption smoothing and the replacement of durables during an unemployment spell

We present theoretical and empirical results on consumption during an unemployment spell. The theory model extends the conventional intertemporal allocation model to take explicit account of the fact that households buy clothing and small durable goods (such as pillows and plates) that are indivisible, irreversible and non-collateralisable. The theoretical analysis suggests that liquidity constrained agents cut back on expenditures on these small durables during a low income spell much more than would be suggested by the income elasticities of these goods in 'normal' times. Conversely, non-durable expenditures flows are much smoother than would be predicted in a model without durables. Thus it seems that agents can smooth utility flows even when total expenditure (on durables and non-durables) is quite volatile. The implications of this model are compared to the implications from three other widely used models of intertemporal allocation. In the empirical section, we exploit the information in a new Canadian panel survey of 20,000 workers who separated from a job in 1993 or 1995. As well as conventional survey information, this survey includes expenditure and asset information. Administrative data from several sources are linked to this panel to provide a detailed picture of the circumstances of households in which one member is unemployed. We estimate a joint total expenditure and demand system and test whether either the level of total expenditure or the structure of demand are sensitive to differences in the Unemployment Insurance benefit rate. We find that they are for households who have no liquid assets. Of the models that we consider, only the intertemporal allocation model proposed in this paper is consistent with this finding.

Pension Benefit Insurance and Pension Plan Portfolio Choice

Pension benefit guarantee policies have been introduced in several countries to protect private pension plan members from the loss of income that would occur if a plan was underfunded when the sponsoring firm terminates a plan. Most of these public insurance schemes face financial difficulty and consequently policy reforms are being discussed or implemented. Economic theory suggests that such schemes will face moral hazard and adverse selection problems. In this note we test a specific theoretical prediction: insured plans will invest more heavily in risky assets. Our test exploits differences in insurance arrangements across Canadian jurisdictions. We find that insured plans invest about 5 percent more in equities than do similar plans without benefit guarantees.Pensions, benefit guarantee, moral hazard

Unemployment Insurance Benefit Levels and Consumption Changes.

We use a Canadian survey of the unemployment to examine how household expenditures after a job loss respond to the level of income replacement provided by UI.UNEMPLOYMENT INSURANCE ; LIVING STANDARDS ; CONSUMPTION; Liquidity constraints

When Might Unemployment Insurance Matter?

Unemployment insurance is more valuable when self-insurance is more diffcult. Self-insurance is more viable when the cost of borrowing and the cost of saving are low. The cost of savings depends on the timing of income and the timing of needs, as well as private and market discount rates. Heterogeneity in any of these factors translates into heterogeneity in the cost of saving and thus in the value of unemployment insurance. We develop a life-cycle model to illustrate these connections. We then provide empirical evidence on the extent of credit constraints and heterogeneity in the cost of saving among job losers. Among job losers, 25% do not have access to credit markets. Liquid assets that can be used to buffer employment shocks are lower for households with children (high needs). Among older households, those with illiquid pension wealth have less liquid wealth.

Shocks, Stocks and Socks

Recent research has demonstrated that some households cut back on expenditures in an unemployment spell. Moreover, some of these households respond to variation in the transitory income provided by unemployment insurance benefits. This suggests that these households are constrained in the sense that they respond to variations in current income even if these do not have any permanent impact. In this paper we take up the question of how households in temporarily straitened circumstances cut back and how they spend marginal dollars of transfer income. Our theoretical and empirical analysis emphasises the importance of allowing for the fact that households buy durable as well as non-durable goods. The theoretical analysis shows that in the short run households can significantly cut back on total expenditures without a significant fall in welfare if they concentrate their budget reductions on durables. We present an empirical analysis based on a Canadian survey of workers who experienced a job separation. Exploiting changes in the unemployment insurance system over our sample period we show that cuts in UI benefits lead to reductions in total expenditure with a stronger impact on clothing than on food expenditures. These effects are particularly strong for households with no liquid assets and/or households in which the lost income was ‘important’ for the household. These findings are in precise agreement with the theoretical predictions.

Fitness Landscape-Based Characterisation of Nature-Inspired Algorithms

A significant challenge in nature-inspired algorithmics is the identification of specific characteristics of problems that make them harder (or easier) to solve using specific methods. The hope is that, by identifying these characteristics, we may more easily predict which algorithms are best-suited to problems sharing certain features. Here, we approach this problem using fitness landscape analysis. Techniques already exist for measuring the "difficulty" of specific landscapes, but these are often designed solely with evolutionary algorithms in mind, and are generally specific to discrete optimisation. In this paper we develop an approach for comparing a wide range of continuous optimisation algorithms. Using a fitness landscape generation technique, we compare six different nature-inspired algorithms and identify which methods perform best on landscapes exhibiting specific features.Comment: 10 pages, 1 figure, submitted to the 11th International Conference on Adaptive and Natural Computing Algorithm