We compare directions of welfare improving marginal tax reform in a situation of involuntary unem... more We compare directions of welfare improving marginal tax reform in a situation of involuntary unemployment. We show the role of distributional considerations in assessing these welfare effects: preferences between macroeconomic variables shift with the degree of inequality aversion. To get a better insight into the importance of distributional considerations in different models, we compare the marginal welfare costs of taxation within three different specifications: the Keynesian regime, a flexible prices/fixed wage-model, and a flexible prices/trade union wage-model. These various models are calibrated for Belgian data of 1980. It turns out that the choice of model matters, even in a marginal perspective. The empirical results also show how the welfare costs in the different models vary with the degree of inequality aversion.
Centrum voor Economische Studiei~. K.U.Lcuve11. We thank Lean Bettendorf, Stef Proost, Denise van... more Centrum voor Economische Studiei~. K.U.Lcuve11. We thank Lean Bettendorf, Stef Proost, Denise van Regemortcr and an anoiiylllo~is referee for their valuable comlneilts and for their iildispensable help with the data. t,, diive a wedge between the net wage q, and the wage costp, . Hence,
We characterize two different approaches to the idea of equality of opportunity. Roemer's social ... more We characterize two different approaches to the idea of equality of opportunity. Roemer's social ordering is motivated by a concern to compensate for the effects of certain (non-responsibility) factors on outcomes. Van de gaer's social ordering is concerned with the equalization of the opportunity sets to which people have access. We show how different invariance axioms open the possibility to go beyond the simple additive specification implied by both rules. This offers scope for a broader interpretation of responsibility-sensitive egalitarianism.
We axiomatize three different motivations for being concerned about intergenerational mobility: m... more We axiomatize three different motivations for being concerned about intergenerational mobility: mobility as a description of movement, as an indication of equality of opportunity, and as an indication of equality of life chances. These three motivations are shown to be incompatible. None of the existing measures is acceptable as an indicator of equality of opportunity or equality of life chances. We propose two new measures of intergenerational mobility which more adequately reflect these concerns.
We compute optimal linear taxes on labor income with quasilinear preferences between income and l... more We compute optimal linear taxes on labor income with quasilinear preferences between income and labor. Agents differ in their productivity and in their taste for leisure. A responsibility sensitive egalitarian wants to compensate for the former differences but not for the latter. This intuition is captured by a social planner that wants to equalize opportunities for subjective utility along the lines of the criteria proposed by Roemer and Van de gaer, and by a social planner evaluating social states based on an advantage function representing reference preferences. Our theoretical results are illustrated with empirical data for Belgium.
This paper explores the link between the measurement of intergenerational mobility and the notion... more This paper explores the link between the measurement of intergenerational mobility and the notion of equality of opportunity. We show how recently proposed theories of equality of opportunity can be meaningfully adapted to the intergenerational context. This throws a new light on the interpretation of existing mobility measures: these may be interesting to measure mobility as movement, but they are inadequate to capture the notion of equality of opportunity. We propose some new mobility measures, which start from the idea that the intergenerational transition matrix gives useful information about the opportunity sets of the children of different social classes. These measures are used in an empirical illustration to evaluate the degree of inequality of opportunity in the US, Great Britain and Italy.
From the mid-1990s citizens in Belgium, Germany, Israel, the Netherlands and Switzerland have a g... more From the mid-1990s citizens in Belgium, Germany, Israel, the Netherlands and Switzerland have a guaranteed periodic choice among risk-bearing sickness funds, who are responsible for purchasing their care or providing them with medical care. The rationale of this arrangement is to stimulate the sickness funds to improve efficiency in health care production and to respond to consumers' preferences. To achieve solidarity, all five countries have implemented a system of risk-adjusted premium subsidies (or risk equalization across risk groups), along with strict regulation of the consumers' direct premium contribution to their sickness fund. In this article we present a conceptual framework for understanding risk adjustment and comparing the systems in the five countries. We conclude that in the case of imperfect risk adjustment */as is the case in all five countries in the year 2001 */the sickness funds have financial incentives for risk selection, which may threaten solidarity, efficiency, quality of care and consumer satisfaction. We expect that without substantial improvements in the risk adjustment formulae, risk selection will increase in all five countries. The issue is particularly serious in Germany and Switzerland. We strongly recommend therefore that policy makers in the five countries give top priority to the improvement of the system of risk adjustment. That would enhance solidarity, cost-control, efficiency and client satisfaction in a system of competing, risk-bearing sickness funds. # (W.P.M.M. van de Ven). Health Policy 65 (2003) 75 Á/98 www.elsevier.com/locate/healthpol 0168-8510/02/$ -see front matter # 2002 Elsevier Science Ireland Ltd. All rights reserved. PII: S 0 1 6 8 -8 5 1 0 ( 0 2 ) 0 0 1 1 8 -5
worden opgevat als een vrije wetenschappelijke tribune waarin de stafleden van het Departement Ec... more worden opgevat als een vrije wetenschappelijke tribune waarin de stafleden van het Departement Economie en van haar onderzoekseenheid, het Centrum voor Economische Studien, opinierende studies en essays publiceren. De opzet bestaat erin om op bevattelijke wijze een reeks van inzichtsverhelderende en beleidsorienterende economische standpunten te brengen. Onze beweeglijke wereld heeft hieraan wei behoefte. Dergelijke reeks zal uiteraard verschillende opinies en denkstromingen brengen. Leuvense Economische Standpunten zullen aileen de visie van de auteur vertolken. Zij kunnen dus niet doorgaan als de visie van een instelling. Adres voor bestellingen : Centrum voor Economische Studien Van Evenstraat 2B B -3000 LEUVEN Prijs per aflevering : 100 F.
In this paper we investigate the evolution of the inequality in well-being across dierent countri... more In this paper we investigate the evolution of the inequality in well-being across dierent countries between 1975 and 2000. We treat well-being as a multidimensional concept focusing on three important dimensions of life: standard of living, health and education. Inequality in the three di- mensions shows a dierent trend between 1975 and 2000. We propose a ‡exible measure of well-being
From the mid-1990s citizens in Belgium, Germany, Israel, the Netherlands and Switzerland have a g... more From the mid-1990s citizens in Belgium, Germany, Israel, the Netherlands and Switzerland have a guaranteed periodic choice among risk-bearing sickness funds, who are responsible for purchasing their care or providing them with medical care. The rationale of this arrangement is to stimulate the sickness funds to improve efficiency in health care production and to respond to consumers' preferences. To achieve solidarity, all five countries have implemented a system of risk-adjusted premium subsidies (or risk equalization across risk groups), along with strict regulation of the consumers' direct premium contribution to their sickness fund. In this article we present a conceptual framework for understanding risk adjustment and comparing the systems in the five countries. We conclude that in the case of imperfect risk adjustment */as is the case in all five countries in the year 2001 */the sickness funds have financial incentives for risk selection, which may threaten solidarity, efficiency, quality of care and consumer satisfaction. We expect that without substantial improvements in the risk adjustment formulae, risk selection will increase in all five countries. The issue is particularly serious in Germany and Switzerland. We strongly recommend therefore that policy makers in the five countries give top priority to the improvement of the system of risk adjustment. That would enhance solidarity, cost-control, efficiency and client satisfaction in a system of competing, risk-bearing sickness funds. # (W.P.M.M. van de Ven). Health Policy 65 (2003) 75 Á/98 www.elsevier.com/locate/healthpol 0168-8510/02/$ -see front matter # 2002 Elsevier Science Ireland Ltd. All rights reserved. PII: S 0 1 6 8 -8 5 1 0 ( 0 2 ) 0 0 1 1 8 -5
Journal of Environmental Economics and Management, 2003
This paper reports the results from a contingent valuation study designed to investigate the infl... more This paper reports the results from a contingent valuation study designed to investigate the influence of warm glow in willingness to pay (WTP) responses. Interindividual differences in warm glow motivation are measured through a factor analysis, performed on a list of attitudinal items. The reported (WTP) measures fail to pass the scope test. Both socioeconomic variables and motivational factor scores are significant in the explanation of the individual WTP measures. We compute ''cold'' WTP measures by taking out the effect of the warm glow motivation. These ''cold'' measures satisfy both the scope test and Hausman's adding-up property. r (P.A.L.D. Nunes). 1 This result is a possible indication of incoherency, but not a sufficient proof. It might also occur if the two goods are perfect substitutes and the marginal utility of additional units is zero once either of the goods is supplied, a case which cannot be qualified as an embedding problem. Moreover, the empirical evidence is mixed. Carson [4] reviews over 30 studies using splitsample tests, which all clearly reject the hypothesis that respondents are insensitive to the scope of the good being valued. 0095-0696/03/$ -see front matter r
No serious discussion of possible pension reforms can dispense with some conception of what justi... more No serious discussion of possible pension reforms can dispense with some conception of what justice requires, both between generations and within each of them. In this paper we first spell out step by step the implications for pension systems of a conception of social justice that articulates in coherent fashion the values of freedom, efficiency and solidarity heralded in the European project. We next consider in this light a number of important policy issues: Should we move towards more funding and less "pay as you go"? Towards a more private system? Towards a more Bismarckian system? Towards a higher retirement age? Towards a more European system?
Background: Belgium has dominantly fee for service remuneration with fixed official tariffs for m... more Background: Belgium has dominantly fee for service remuneration with fixed official tariffs for medical and paramedical interventions, implants and nursing and hotel costs in hospital. On top of these tariffs there is a large degree of freedom to charge additional fees, so-called supplements. Protective legislation limits this freedom in common rooms and for people with preferential insurance status (reflecting weaker socio-economic groups). Objective: The objective of this paper is to analyse how the freedom to set prices is used by the providers and to evaluate the impact of the protective regulation. Methods: Data on 55,000 hospitalisations, retrieved from an administrative database and relating to all hospitalisations of a representative sample of 300,000 individuals for 2003 are used. To approximate the price setting behavior of hospitals we calculate 'unit supplement prices' by taking the ratio of supplements over total official health care expenditures. This is done a...
Objectives: While policymakers already debated a lot on co-payments, there is an increasing conce... more Objectives: While policymakers already debated a lot on co-payments, there is an increasing concern about the huge increase of supplements as well. In this study we investigate the distribution of the burden of supplements. We want to describe the characteristics of the payer of supplements. Methodology: We use an administrative dataset of the different sickness funds with annual data for 2003 of a representative sample of about 300,000 individuals. We define supplements as the difference between the total amount paid by the patient and the official price (reimbursements from the health insurance co-payments); or as the total amount itself if there are no reimbursements. We estimate different specifications of the model. First, we start with a benchmark: OLS of the expenditures on several independent variables. Two-part models with logistic specification in the first part and different specifications in the second part (OLS, OLS on log expenditures and gamma with log specification) ...
We compare directions of welfare improving marginal tax reform in a situation of involuntary unem... more We compare directions of welfare improving marginal tax reform in a situation of involuntary unemployment. We show the role of distributional considerations in assessing these welfare effects: preferences between macroeconomic variables shift with the degree of inequality aversion. To get a better insight into the importance of distributional considerations in different models, we compare the marginal welfare costs of taxation within three different specifications: the Keynesian regime, a flexible prices/fixed wage-model, and a flexible prices/trade union wage-model. These various models are calibrated for Belgian data of 1980. It turns out that the choice of model matters, even in a marginal perspective. The empirical results also show how the welfare costs in the different models vary with the degree of inequality aversion.
Centrum voor Economische Studiei~. K.U.Lcuve11. We thank Lean Bettendorf, Stef Proost, Denise van... more Centrum voor Economische Studiei~. K.U.Lcuve11. We thank Lean Bettendorf, Stef Proost, Denise van Regemortcr and an anoiiylllo~is referee for their valuable comlneilts and for their iildispensable help with the data. t,, diive a wedge between the net wage q, and the wage costp, . Hence,
We characterize two different approaches to the idea of equality of opportunity. Roemer's social ... more We characterize two different approaches to the idea of equality of opportunity. Roemer's social ordering is motivated by a concern to compensate for the effects of certain (non-responsibility) factors on outcomes. Van de gaer's social ordering is concerned with the equalization of the opportunity sets to which people have access. We show how different invariance axioms open the possibility to go beyond the simple additive specification implied by both rules. This offers scope for a broader interpretation of responsibility-sensitive egalitarianism.
We axiomatize three different motivations for being concerned about intergenerational mobility: m... more We axiomatize three different motivations for being concerned about intergenerational mobility: mobility as a description of movement, as an indication of equality of opportunity, and as an indication of equality of life chances. These three motivations are shown to be incompatible. None of the existing measures is acceptable as an indicator of equality of opportunity or equality of life chances. We propose two new measures of intergenerational mobility which more adequately reflect these concerns.
We compute optimal linear taxes on labor income with quasilinear preferences between income and l... more We compute optimal linear taxes on labor income with quasilinear preferences between income and labor. Agents differ in their productivity and in their taste for leisure. A responsibility sensitive egalitarian wants to compensate for the former differences but not for the latter. This intuition is captured by a social planner that wants to equalize opportunities for subjective utility along the lines of the criteria proposed by Roemer and Van de gaer, and by a social planner evaluating social states based on an advantage function representing reference preferences. Our theoretical results are illustrated with empirical data for Belgium.
This paper explores the link between the measurement of intergenerational mobility and the notion... more This paper explores the link between the measurement of intergenerational mobility and the notion of equality of opportunity. We show how recently proposed theories of equality of opportunity can be meaningfully adapted to the intergenerational context. This throws a new light on the interpretation of existing mobility measures: these may be interesting to measure mobility as movement, but they are inadequate to capture the notion of equality of opportunity. We propose some new mobility measures, which start from the idea that the intergenerational transition matrix gives useful information about the opportunity sets of the children of different social classes. These measures are used in an empirical illustration to evaluate the degree of inequality of opportunity in the US, Great Britain and Italy.
From the mid-1990s citizens in Belgium, Germany, Israel, the Netherlands and Switzerland have a g... more From the mid-1990s citizens in Belgium, Germany, Israel, the Netherlands and Switzerland have a guaranteed periodic choice among risk-bearing sickness funds, who are responsible for purchasing their care or providing them with medical care. The rationale of this arrangement is to stimulate the sickness funds to improve efficiency in health care production and to respond to consumers' preferences. To achieve solidarity, all five countries have implemented a system of risk-adjusted premium subsidies (or risk equalization across risk groups), along with strict regulation of the consumers' direct premium contribution to their sickness fund. In this article we present a conceptual framework for understanding risk adjustment and comparing the systems in the five countries. We conclude that in the case of imperfect risk adjustment */as is the case in all five countries in the year 2001 */the sickness funds have financial incentives for risk selection, which may threaten solidarity, efficiency, quality of care and consumer satisfaction. We expect that without substantial improvements in the risk adjustment formulae, risk selection will increase in all five countries. The issue is particularly serious in Germany and Switzerland. We strongly recommend therefore that policy makers in the five countries give top priority to the improvement of the system of risk adjustment. That would enhance solidarity, cost-control, efficiency and client satisfaction in a system of competing, risk-bearing sickness funds. # (W.P.M.M. van de Ven). Health Policy 65 (2003) 75 Á/98 www.elsevier.com/locate/healthpol 0168-8510/02/$ -see front matter # 2002 Elsevier Science Ireland Ltd. All rights reserved. PII: S 0 1 6 8 -8 5 1 0 ( 0 2 ) 0 0 1 1 8 -5
worden opgevat als een vrije wetenschappelijke tribune waarin de stafleden van het Departement Ec... more worden opgevat als een vrije wetenschappelijke tribune waarin de stafleden van het Departement Economie en van haar onderzoekseenheid, het Centrum voor Economische Studien, opinierende studies en essays publiceren. De opzet bestaat erin om op bevattelijke wijze een reeks van inzichtsverhelderende en beleidsorienterende economische standpunten te brengen. Onze beweeglijke wereld heeft hieraan wei behoefte. Dergelijke reeks zal uiteraard verschillende opinies en denkstromingen brengen. Leuvense Economische Standpunten zullen aileen de visie van de auteur vertolken. Zij kunnen dus niet doorgaan als de visie van een instelling. Adres voor bestellingen : Centrum voor Economische Studien Van Evenstraat 2B B -3000 LEUVEN Prijs per aflevering : 100 F.
In this paper we investigate the evolution of the inequality in well-being across dierent countri... more In this paper we investigate the evolution of the inequality in well-being across dierent countries between 1975 and 2000. We treat well-being as a multidimensional concept focusing on three important dimensions of life: standard of living, health and education. Inequality in the three di- mensions shows a dierent trend between 1975 and 2000. We propose a ‡exible measure of well-being
From the mid-1990s citizens in Belgium, Germany, Israel, the Netherlands and Switzerland have a g... more From the mid-1990s citizens in Belgium, Germany, Israel, the Netherlands and Switzerland have a guaranteed periodic choice among risk-bearing sickness funds, who are responsible for purchasing their care or providing them with medical care. The rationale of this arrangement is to stimulate the sickness funds to improve efficiency in health care production and to respond to consumers' preferences. To achieve solidarity, all five countries have implemented a system of risk-adjusted premium subsidies (or risk equalization across risk groups), along with strict regulation of the consumers' direct premium contribution to their sickness fund. In this article we present a conceptual framework for understanding risk adjustment and comparing the systems in the five countries. We conclude that in the case of imperfect risk adjustment */as is the case in all five countries in the year 2001 */the sickness funds have financial incentives for risk selection, which may threaten solidarity, efficiency, quality of care and consumer satisfaction. We expect that without substantial improvements in the risk adjustment formulae, risk selection will increase in all five countries. The issue is particularly serious in Germany and Switzerland. We strongly recommend therefore that policy makers in the five countries give top priority to the improvement of the system of risk adjustment. That would enhance solidarity, cost-control, efficiency and client satisfaction in a system of competing, risk-bearing sickness funds. # (W.P.M.M. van de Ven). Health Policy 65 (2003) 75 Á/98 www.elsevier.com/locate/healthpol 0168-8510/02/$ -see front matter # 2002 Elsevier Science Ireland Ltd. All rights reserved. PII: S 0 1 6 8 -8 5 1 0 ( 0 2 ) 0 0 1 1 8 -5
Journal of Environmental Economics and Management, 2003
This paper reports the results from a contingent valuation study designed to investigate the infl... more This paper reports the results from a contingent valuation study designed to investigate the influence of warm glow in willingness to pay (WTP) responses. Interindividual differences in warm glow motivation are measured through a factor analysis, performed on a list of attitudinal items. The reported (WTP) measures fail to pass the scope test. Both socioeconomic variables and motivational factor scores are significant in the explanation of the individual WTP measures. We compute ''cold'' WTP measures by taking out the effect of the warm glow motivation. These ''cold'' measures satisfy both the scope test and Hausman's adding-up property. r (P.A.L.D. Nunes). 1 This result is a possible indication of incoherency, but not a sufficient proof. It might also occur if the two goods are perfect substitutes and the marginal utility of additional units is zero once either of the goods is supplied, a case which cannot be qualified as an embedding problem. Moreover, the empirical evidence is mixed. Carson [4] reviews over 30 studies using splitsample tests, which all clearly reject the hypothesis that respondents are insensitive to the scope of the good being valued. 0095-0696/03/$ -see front matter r
No serious discussion of possible pension reforms can dispense with some conception of what justi... more No serious discussion of possible pension reforms can dispense with some conception of what justice requires, both between generations and within each of them. In this paper we first spell out step by step the implications for pension systems of a conception of social justice that articulates in coherent fashion the values of freedom, efficiency and solidarity heralded in the European project. We next consider in this light a number of important policy issues: Should we move towards more funding and less "pay as you go"? Towards a more private system? Towards a more Bismarckian system? Towards a higher retirement age? Towards a more European system?
Background: Belgium has dominantly fee for service remuneration with fixed official tariffs for m... more Background: Belgium has dominantly fee for service remuneration with fixed official tariffs for medical and paramedical interventions, implants and nursing and hotel costs in hospital. On top of these tariffs there is a large degree of freedom to charge additional fees, so-called supplements. Protective legislation limits this freedom in common rooms and for people with preferential insurance status (reflecting weaker socio-economic groups). Objective: The objective of this paper is to analyse how the freedom to set prices is used by the providers and to evaluate the impact of the protective regulation. Methods: Data on 55,000 hospitalisations, retrieved from an administrative database and relating to all hospitalisations of a representative sample of 300,000 individuals for 2003 are used. To approximate the price setting behavior of hospitals we calculate 'unit supplement prices' by taking the ratio of supplements over total official health care expenditures. This is done a...
Objectives: While policymakers already debated a lot on co-payments, there is an increasing conce... more Objectives: While policymakers already debated a lot on co-payments, there is an increasing concern about the huge increase of supplements as well. In this study we investigate the distribution of the burden of supplements. We want to describe the characteristics of the payer of supplements. Methodology: We use an administrative dataset of the different sickness funds with annual data for 2003 of a representative sample of about 300,000 individuals. We define supplements as the difference between the total amount paid by the patient and the official price (reimbursements from the health insurance co-payments); or as the total amount itself if there are no reimbursements. We estimate different specifications of the model. First, we start with a benchmark: OLS of the expenditures on several independent variables. Two-part models with logistic specification in the first part and different specifications in the second part (OLS, OLS on log expenditures and gamma with log specification) ...
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Papers by Erik Schokkaert