Estimating the Value of Public Insurance Using Complementary Private Insurance

55 Pages Posted: 31 Aug 2016 Last revised: 12 Sep 2016

See all articles by Marika Cabral

Marika Cabral

University of Texas at Austin; National Bureau of Economic Research (NBER)

Mark R. Cullen

Stanford University

Multiple version iconThere are 2 versions of this paper

Date Written: August 2016

Abstract

The welfare associated with public insurance is often difficult to quantify because the demand for coverage is unobserved and thus cannot be used to analyze welfare. However, in many settings, individuals can purchase private insurance to supplement public coverage. This paper outlines an approach to use data and variation from private complementary insurance to quantify welfare associated with counterfactuals related to compulsory public insurance. We then apply this approach using administrative data on disability insurance. Our findings suggests that public disability insurance generates substantial surplus for the sample population, and there may be gains to increasing the generosity of coverage.

Suggested Citation

Cabral, Marika and Cullen, Mark R., Estimating the Value of Public Insurance Using Complementary Private Insurance (August 2016). NBER Working Paper No. w22583. Available at SSRN: https://ssrn.com/abstract=2832586

Marika Cabral (Contact Author)

University of Texas at Austin ( email )

Department of Economics
2225 Speedway, BRB 1.116, C3100
Austin, TX 78712
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Mark R. Cullen

Stanford University ( email )

Stanford, CA 94305
United States

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