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Social insurance with risk-reducing investments
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UNSPECIFIED (2000) Social insurance with risk-reducing investments. ECONOMICA, 67 (265). pp. 37-56. ISSN 0013-0427.
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Abstract
A two-sector model with sector-dependent disability risks is presented. Working in the low-risk sector requires skills that can be obtained by investments in education. Moral hazard precludes full insurance. The labour force allocation is responsive to the incentives created by a social insurance system. The rationale for intervention lies in the government's power to cross-subsidize between the sectors, and it is demonstrated how the responsiveness of the labour force allocation limits cross-subsidization. The second-best policy is time-inconsistent. The consistent equilibrium is explored and is argued to provide weak incentives to reduce risks.
Item Type: | Journal Article | ||||
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Subjects: | H Social Sciences > HC Economic History and Conditions | ||||
Journal or Publication Title: | ECONOMICA | ||||
Publisher: | BLACKWELL PUBL LTD | ||||
ISSN: | 0013-0427 | ||||
Official Date: | February 2000 | ||||
Dates: |
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Volume: | 67 | ||||
Number: | 265 | ||||
Number of Pages: | 20 | ||||
Page Range: | pp. 37-56 | ||||
Publication Status: | Published |
Data sourced from Thomson Reuters' Web of Knowledge
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