WP n° 64

Workers Compensation Insurance: Incentive Effects of Experience Rating on Work-related Health and Safety
Lengagne P. (Irdes)
Irdes working paper n° 64. 2014/12

This article examines Workers Compensation Insurance experience rating premiums setting, a common financial incentive tool existing in several countries. Premiums paid by firms are experience rated, which may encourage them to reduce work-related injuries and disabilities. This article provides a literature review on effects of experience rating on work-related health and safety, and empirical results on the French jurisdiction, using sectorial data from industry and construction sectors in 2005. Results are consistent with the hypothesis that this policy tool is a lever that contributes to improve working conditions and reduce work-related injuries rates.

WP n° 58

Supplemental health insurance and healthcare consumption: A dynamic approach to moral hazard
Franc C. (Cermes3, Cnrs UMR 8211, Inserm U988, EHESS), Perronnin M. (Irdes), Pierre A. (Irdes)
Irdes working paper n° 58. 2014/01

We analyze the existence and persistence of moral hazard over time to test the assumption of pent-up demand. We consider the effects of supplemental health insurance provided by a private insurer when added to compulsory public insurance already supplemented by private insurance. Using panel data from a French mutuelle, we compute error component models with the Chamberlain specification to control for adverse selection. By separating outpatient care consumption into (1) the probability of healthcare use, (2) the number of uses conditional on use and (3) the per-unit cost of care, we provide evidence that supplemental insurance is significantly and positively associated with (1), (2) and (3). However, these effects decrease significantly over time. This pattern supports the existence of pent-up demand, the magnitude of which varies greatly and depends on the dimensions (1), (2) and (3) and the type of care (physician care, prescription drugs, dental care or optical care).