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Incentives, Redistribution and Social Insurance

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  • Jean-Charles Rochet

    (GREMAQ, Université de Toulouse, 1, Place Anatole France, 31042 Toulouse cedex, France)

Abstract

We extend the familiar income taxation model à la Mirrlees, so as to include income uncertainty, due for instance to a risk of illness. Following a line of research initiated by Blomqvist and Horn [1984] we prove that the existence of a Social Health Insurance system may be justified even when the insurance market is efficient. Moreover, if there is a negative statistical dependence between probability of illness and labor productivity, then the optimum of a Utilitarianist Social Welfare function implies that Social Insurance provides a complete coverage for every household. The Geneva Papers on Risk and Insurance Theory (1991) 16, 143–165. doi:10.1007/BF02386304

Suggested Citation

  • Jean-Charles Rochet, 1991. "Incentives, Redistribution and Social Insurance," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 16(2), pages 143-165, December.
  • Handle: RePEc:pal:genrir:v:16:y:1991:i:2:p:143-165
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    References listed on IDEAS

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    Cited by:

    1. Darío Maldonado, 2006. "Social security, income taxation and poverty alleviation," REVISTA DE ECONOMÍA DEL ROSARIO, UNIVERSIDAD DEL ROSARIO, June.
    2. Cyril Hariton & Gwenaël Piaser, 2007. "When Redistribution Leads to Regressive Taxation," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(4), pages 589-606, August.
    3. Cremer, Helmuth & Roeder, Kerstin, 2017. "Social insurance with competitive insurance markets and risk misperception," Journal of Public Economics, Elsevier, pages 138-147.
    4. Huang, Rachel J. & Tsai, Jeffrey T. & Tzeng, Larry Y., 2008. "Government-provided annuities under insolvency risk," Insurance: Mathematics and Economics, Elsevier, vol. 43(3), pages 377-385, December.
    5. Hindriks, Jean & De Donder, Philippe, 2003. "The politics of redistributive social insurance," Journal of Public Economics, Elsevier, vol. 87(12), pages 2639-2660, December.
    6. John Leach, 2010. "Ex Post Welfare under Alternative Health Care Systems," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(6), pages 1027-1057, December.
    7. Pierre Pestieau & Gregory Ponthiere, 2012. "The Public Economics of Increasing Longevity," Hacienda Pública Española, IEF, vol. 200(1), pages 41-74, March.
    8. Pierre Pestieau & Grégory Ponthiere, 2012. "On the Policy Implications of Changing Longevity," CESifo Working Paper Series 3926, CESifo Group Munich.
    9. De Donder, Philippe & Hindriks, Jean, 2007. "Equilibrium social insurance with policy-motivated parties," European Journal of Political Economy, Elsevier, vol. 23(3), pages 624-640, September.
    10. HINDRIKS, Jean, 2000. "Public versus private insurance: a political economy argument," CORE Discussion Papers 2000058, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    11. Barros, Pedro P., 1999. "Budget effects of health care 'vouchers'," Economics Letters, Elsevier, vol. 62(2), pages 229-235, February.
    12. Netzer, Nick & Scheuer, Florian, 2007. "Taxation, insurance, and precautionary labor," Journal of Public Economics, Elsevier, vol. 91(7-8), pages 1519-1531, August.
    13. Alessandro Petretto, 2013. "On the Fuzzy Boundaries between Public and Private in Health-Care Organization and Funding Systems," Rivista di Politica Economica, SIPI Spa, issue 1, pages 327-370, January-M.
    14. Friedrich Breyer & Andreas Haufler, 2000. "Health Care Reform: Separating Insurance from Income Redistribution," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(4), pages 445-461, August.
    15. Cremer, Helmuth & Roeder, Kerstin, 2013. "Long-term care policy, myopia and redistribution," Journal of Public Economics, Elsevier, pages 33-43.
    16. Casamatta, Georges & Cremer, Helmuth & Pestieau, Pierre, 2000. "Political sustainability and the design of social insurance," Journal of Public Economics, Elsevier, vol. 75(3), pages 341-364, March.
    17. Petretto, Alessandro, 1999. "Optimal social health insurance with supplementary private insurance," Journal of Health Economics, Elsevier, vol. 18(6), pages 727-745, December.
    18. Susanna Kochskämper, 2012. "Reformdebatten in der Krankenversicherung vor dem Hintergrund des europäischen Binnenmarktes," Otto-Wolff-Institut Discussion Paper Series 02/2012, Otto-Wolff-Institut für Wirtschaftsordnung, Köln, Deutschland.

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