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The Recipient Value and Distributional Impact of the Commonwealth Seniors Health Card in 2007

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Abstract

This paper considers the recipient value and distributional impact of the Commonwealth Seniors Health Card (CSHC) by analysing a range of possible behavioural responses to economic incentives. First, I estimate the recipient value by considering the trade-off between moral hazard and risk pooling. The utility gain through risk-pooling is found to be negligible. The deadweight loss through moral hazard may be considerable. I also use illustrative models to demonstrate the possible effects of the CSHC on savings and labour supply. Whilst the CSHC may induce some people to save and work more, it may have the opposite effect on others.

Suggested Citation

  • Siminski, Peter, 2008. "The Recipient Value and Distributional Impact of the Commonwealth Seniors Health Card in 2007," Economics Working Papers wp08-04, School of Economics, University of Wollongong, NSW, Australia.
  • Handle: RePEc:uow:depec1:wp08-04
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    File URL: http://www.uow.edu.au/content/groups/public/@web/@commerce/@econ/documents/doc/uow042465.pdf
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    References listed on IDEAS

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    1. Keith A. Bender, 2003. "Examining Equality between Public- and Private-Sector Wage Distributions," Economic Inquiry, Western Economic Association International, vol. 41(1), pages 62-79, January.
    2. Borland, Jeff & Hirschberg, Joe & Lye, Jenny, 1998. "Earnings of Public Sector and Private Sector Employees in Australia: Is There a Difference?," The Economic Record, The Economic Society of Australia, pages 36-53.
    3. Abrevaya, Jason & Dahl, Christian M, 2008. "The Effects of Birth Inputs on Birthweight," Journal of Business & Economic Statistics, American Statistical Association, vol. 26, pages 379-397.
    4. Bender, Keith A, 1998. " The Central Government-Private Sector Wage Differential," Journal of Economic Surveys, Wiley Blackwell, vol. 12(2), pages 177-220, April.
    5. John Creedy & Guyonne Kalb, 2005. "Discrete Hours Labour Supply Modelling: Specification, Estimation and Simulation," Journal of Economic Surveys, Wiley Blackwell, pages 697-734.
    6. Gregory, Robert G. & Borland, Jeff, 1999. "Recent developments in public sector labor markets," Handbook of Labor Economics,in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 53, pages 3573-3630 Elsevier.
    7. Shoshana Neuman & Ronald Oaxaca, 2004. "Wage Decompositions with Selectivity-Corrected Wage Equations: A Methodological Note," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, pages 3-10.
    8. Blaise Melly, 2005. "Public-private sector wage differentials in Germany: Evidence from quantile regression," Empirical Economics, Springer, pages 505-520.
    9. Don Bellante & Albert N. Link, 1981. "Are Public Sector Workers More Risk Averse Than Private Sector Workers?," ILR Review, Cornell University, ILR School, pages 408-412.
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    More about this item

    Keywords

    distributional impact; health insurance; recipient value; Australia; retirement;

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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