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Do myopia and asymmetric information matter in the demand for social insurance?

Author

Listed:
  • Walid Merouani

    (Centre de Recherche en Economie Appliquée pour le Développement (ALGERIE))

  • Nacer-Eddine Hammouda
  • Claire El Moudden

Abstract

This article challenges the topic of low demand for social insurance by exploring an original survey in the Algerian labor market. Related literature has focused on the efficiency of social insurance systems and discussed their ability to cover everyone. On the other hand, empirical studies highlighted the role of socio-demographic factors in understanding the low social insurance coverage. But the use of behavioral economics tools is still scarce in this field. This article highlights the impact of time discounting and knowledge of social policy on the demand for social insurance. To make the result more robust, we use the discrete choice model. The outcome clearly shows that forward looking and knowing social security rules increase the participation to social insurance system. Furthermore, we confirm the role of age, gender, income and education, to be significant determinants of social insurance demand. We argue these conclusions should have practical policy implications.

Suggested Citation

  • Walid Merouani & Nacer-Eddine Hammouda & Claire El Moudden, 2018. "Do myopia and asymmetric information matter in the demand for social insurance?," Working Papers 1212, Economic Research Forum, revised 28 Jun 2018.
    • Handle: RePEc:erg:wpaper:1212
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    References listed on IDEAS

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