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An empirical analysis of US and Japanese health insurance using age-period-cohort decomposition

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Author Info
Kosei Fukuda (College of Economics, Nihon University, 1-3-2 Misakicho, Chiyoda-ku, Tokyo 101-8360, Japan)

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Abstract

Aggregate data on household health insurance expenditure in the US and Japan that are classified by period and age are decomposed into age, period, and cohort effects by using the Bayesian cohort models. These models are developed to overcome the identification problem involved in cohort analysis. Despite the differences between the health insurance systems of the two countries, three interesting empirical findings are obtained. First, in both the countries, the age effects are the most influential, and the cohort effects have negligible influence. The latter provides a striking policy implication since the generational imbalance in social security expenditures is widely recognized in developed countries. Second, in both the countries, the period effects show a roughly upward trend. Finally, the age effects exhibit a roughly upward movement for all age groups in the US; however, in Japan, these effects show a downward movement for the 55-59 age group due to the changes in the health insurance system on retirement. Copyright © 2006 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.1179
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Publisher Info
Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 16 (2007)
Issue (Month): 5 ()
Pages: 475-489
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Handle: RePEc:wly:hlthec:v:16:y:2007:i:5:p:475-489

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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  1. Yosihiko Ogata, 2000. "Empirical Bayes Age-Period-Cohort Analysis of Retrospective Incidence Data," Scandinavian Journal of Statistics, Danish Society for Theoretical Statistics, Finnish Statistical Society, Norwegian Statistical Association and Swedish Statistical Association, vol. 27(3), pages 415-432. [Downloadable!] (restricted)
  2. David Parkin & Nigel Rice & Matthew Sutton, 1999. "Non- and semi-parametric estimation of age and time heterogeneity in repeated cross-sections: an application to self-reported morbidity and general practitioner utilization1," Health Economics, John Wiley & Sons, Ltd., vol. 8(5), pages 429-440.
  3. Propper, Carol & Rees, Hedley & Green, Katherine, 2001. "The Demand for Private Medical Insurance in the UK: A Cohort Analysis," Economic Journal, Royal Economic Society, vol. 111(471), pages C180-200, May. [Downloadable!] (restricted)
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