Symposium on Labour Force Participation in Canada in the 1990s: An Introduction and Overview

A major development in the Canadian labour market in the 1990s has been the decline in labour force participation. This issue of Canadian Business Economics consists of a symposium of articles that explore this issue. The idea for this symposium came out of a December 1997 workshop on labour force participation organized by the Canadian Employment Research Forum. The Centre for the Study of Living Standards and Human Resources Development Canada then organized two sessions on labour force participation at the annual meeting of the Canadian Economics Association in May 1998 where these papers were first presented. The papers were then refereed and revised for publication. This introduction sets the context for the symposium that follows by presenting basic data on labour force participation rate trends and summarizing and synthesizing the key findings of the five articles.Labour Force Participation, Labor Force Participation, Participation Rate, Labour Force Participation Rate, Labor Force Participation Rate, Canada, Living Standards, Standard of Living, Output Gap, Potential Employment, Potential Output, Potential Growth

Aging, Health and Aggregate Medical Care Spending in France

I investigate the role of education on health, using country level data and the production frontier framework suggested by the World Health Organization to assess performances of health care systems. I find that the role of human capital is much smaller than what appears in the WHO frontier model, and the relationship exhibits diminishing return in the observed range. Taking into account the non-linearity in this relationship generates a different ranking of countries according to the efficiency of their health care system. This suggests that the method currently used by the WHO indeed favours health care systems operating in countries which underinvested in education in the past. The relationship between education and health changes around an average value of 8 years of education per individual: above that level, the return of years of education in health is zero.Human capital, Rate of return, Economic impact, Efficiency

Decline in Youth Participation in Canada in the 1990s: Structural or Cyclical?

Of the three major age groups, youth (aged 15-24), experienced the largest fall in labour force participation and accounted for the lion’s share of the aggregate decline. Consequently, an understanding of the factors behind this development is essential to an overall understanding of the fall in labour force participation in the 1990s in Canada. In the fifth and final article in the symposium, Richard Archambault and Louis Grignon examine the causes of this large fall in youth labour force participation in Canada in the 1990s. They disaggregate the youth participation rate into three components: the student participation rate, the non-student participation rate, and the school enrolment rate. The aggregate youth rate is the sum of the student and non-student rates weighted by their respective shares of the population (the enrolment rate for students). Such an approach makes it possible to take account of behavioural differences between students and non-students and to treat the enrolment rate as a phenomenon to be explained rather than a determinant of the participation rate. All three variables are modelled as a function of a cyclical variable and a number of structural variables - the real wage, the relative minimum wage, employment insurance, social assistance, and a time trend. The results show the importance of economic conditions and the modest effect of public policy programs on the decision to participate in the labour market and go to school. Based on the equations estimated for the 1976-96 period, a dynamic simulation was conducted over the 1990-96 period to account for the impact of the variables on the student and non-student participation rates and enrolment rate. According to the equations estimated for the 15-24 age group, the cyclical variable accounts for about one half of the decline in the youth participation rate between 1990 and 1996, two thirds of the decline in the student participation rate, and about one third of the fall in both the non-student participation rate and rise in the enrolment rate. The remaining decline in the two participation rates and rise in the enrolment rate are not to any significant degree explained by the four structural variables, but rather are either captured by the time trend or not explained at all. Given these results, the authors conclude that we have a poor understanding of the non-cyclical forces that account for up to one half of the decline in youth labour force participation in the 1990s.Canada, Labour Force Participation, Labor Force Participation, Participation Rate, Labour Force Participation Rate, Labor Force Participation Rate, Age Structure, Age, Youth, Teenage, Young Adult, Student, Enrolment Rate, Enrolment, Enrollment Rate, Enrollment

Sickness and injury leave in France: moral hazard or strain?

From 1997 to 2001, the total payment to compensate for sickness and injury leaves increased dramatically in France. Since this change coincided with a decrease in unemployment rate,three hypothesizes should be proposed as possible explanations consistently with the literature: moral hazard (workers fear less to loose their job, therefore use sickness leave more confidently); strain (workers work longer hours or under more stringent rules); labor-force composition effect (less healthy individuals are incorporated into the labor force). We investigate the first two strands of explanation using a household survey (ESPS) enriched with claims data from compulsory health insurance funds on sickness leaves (EPAS). We model separately number of leaves per individual (cumulative logit) and duration of leaves (random-effect model). According to our findings, in France, the individual propensity to take sickness leave is mainly influenced by strain in the workplace and by a labor-force composition effect. Conditional duration of spells is not well explained at the individual level: the only significant factor is usual weekly work duration. Influence of moral hazard is not clearly ascertained: it has few impact on occurrences of leave and no impact on duration.Sickness, Labour Force

The Value of Fixed-Reimbursement Healthcare Insurance- Evidence from Cancer Patients in Ontario, Canada

Critical illness insurance (CII) is a fixed-reimbursement scheme conditioned on the event of a loss, not the size of the loss. We investigate demand for CII. Consumers will be willing to purchase CII depending on their degree of risk aversion to the cost of treating illness, their forgone income, and desire for being compensated for utility loss when sick. Using a theoretical model based on Eeckhoudt (2003), we run simulations using Canadian data for CII policy reimbursement dollar values of purchases, family income, cancer expenditure, and net wealth. We then evaluate how well these models predict actual CII purchases.health insurance, healthcare insurance, fixed-reimbursement insurance, state-utility transfer, expected utility, cancer

The regulatory and supervisory framework for fixed income markets in Europe

look at the development and regulation of fixed income securities markets in Europe. Fixed income securities markets in Europe have historically been characterized by a number of national markets that were interconnected by way of foreign exchange markets. They are presently undergoing major changes in size, infrastructure, and regulation. The authors describe the current state of the ongoing European regulatory and supervisory reform and the main drivers behind it. They conclude that European fixed income securities market regulation and infrastructure are not (yet) homogeneous. In some countries fixed income market regulation has been developed after intense political reflections on ways and means of promoting safe and efficient capital markets. In other countries, fixed incomemarket regulation is a product of learning-by-doing (such as ad hoc reflections based on negative market experiences and financial scandals). To illustrate the heterogeneity in the European fixed income markets, the authors include two examples: France as an example of a country from the euro area, and Denmark as an example of a country outside the euro area.Environmental Economics&Policies,Payment Systems&Infrastructure,Financial Intermediation,International Terrorism&Counterterrorism,Fiscal&Monetary Policy,Environmental Economics&Policies,Financial Intermediation,Insurance&Risk Mitigation,Insurance Law,National Governance

Income and the Demand for Complementary Health Insurance in France

This paper examines the demand for complementary health insurance (CHI) in the non-group market in France and the reasons why the near poor seem price insensitive. First we develop a theoretical model based on a simple tradeoff between two goods: CHI and a composite good reflecting all other consumptions. Then we estimate a model of CHI consumption and empirically test the impact of potential determinants of demand for coverage: risk aversion, asymmetrical information, non-expected utility, the demand for quality and health, and supply-side factors such as price discrimination. We interpret our empirical findings in terms of crossed price and income elasticity of the demand for CHI. Last, we use these estimates of elasticity to simulate the effect of various levels of price subsidies on the demand for CHI among those with incomes around the poverty level in France. We find that the main motivation for purchasing CHI in France is protection against the financial risk associated with co-payments in the public health insurance scheme. We also observe a strong income effect suggesting that affordability might be an important determinant. Our simulations indicate that no policy of price subsidy can significantly increase the take-up of CHI among the near poor; any increase in the level of subsidy generates a windfall benefit for richer households.Demand for health insurance, Uninsured, Premium subsidies

Psychosocial resources and social health inequalities in France: Exploratory findings from a general population survey

We study the psychosocial determinants of self-assessed health in order to explain social inequalities in health in France. We use a unique general population survey to assess the respective impact on self-assessed health status of subjective perceptions of social capital, social support, and sense of control, controlling for standard socio-demographic factors (SES, income, education, age and gender). The survey is unique in that it provides a variety of measures of self-perceived psychosocial resources (trust and civic engagement, social support, sense of control, and self-esteem. We find empirical support for the link between the subjective perception of psychosocial resources and health. Sense of control at work is the most important correlate of health status after income. Other important ones are civic engagement and social support. To a lesser extent, sense of being lower in the social hierarchy is associated with poorer health status. On the contrary, relative deprivation does not affect health in our survey. Since access to psychosocial resources is not equally distributed in the population, these findings suggest that psychosocial factors can partially explain of social inequalities in health in France.social capital, social support, relative deprivation, sense of control, social health inequalities, France

Psychosocial resources and social health inequalities in France: Exploratory findings from a general population survey

We study the psychosocial determinants of health, and their impact on social inequalities in health in France. We use a unique general population survey to assess the respective impact on selfassessed health status of subjective perceptions of social capital controlling for standard socio-demographic factors (occupation, income, education, age and gender). The survey is unique for two reasons: First, we use a variety of measures to describe self-perceived social capital (trust and civic engagement, social support, sense of control, and selfesteem). Second, we can link these measures of social capital to a wealth of descriptors of health status and behaviours. We find empirical support for the link between the subjective perception of social capital and health. Sense of control at work is the most important determinant of health status. Other important ones are civic engagement and social support. To a lesser extent, sense of being lower in the social hierarchy is associated with poorer health status. On the contrary, relative deprivation does not affect health in our survey. Since access to social capital is not equally distributed in the population, these findings suggest that psychosocial factors can explain a substantial part of social inequalities in health in France.social capital, social support, relative deprivation, sense of control, social health inequalities, France

Health expenditure growth : reassessing the threat of ageing

In this paper we evaluate the respective effects of demographic change, changes in morbidity and changes in practices on growth in health care expenditures. We use microdata, i.e. representative samples of 3441 and 5003 French individuals observed in 1992 and 2000. Our data provide detailed information about morbidity and allow us to observe three components of expenditures: ambulatory care, pharmaceutical and hospital expenditures.We propose an original microsimulation method to identify the components of the drift observed between 1992 and 2000 in the health expenditure age profile. On the one hand, we find empirical evidence of health improvement at a given age: changes in morbidity induce a downward drift of the profile. On the other hand, the drift due to changes in practices is upward and sizeable. Detailed analysis attributes most of this drift to technological innovation.After applying our results at the macroeconomic level, we find that the rise in health care expenditures due to ageing is relatively small. The impact of changes in practices is 3.8 times larger. Furthermore, changes in morbidity induce savings which more than offset the increase in spending due to population ageing.ageing ; health expenditure ; microsimulations ; econometrics