Replication data for: Optimal Taxation and Social Insurance with Endogenous Private Insurance

Principal Investigator(s): View help for Principal Investigator(s) Raj Chetty; Emmanuel Saez

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Project Citation:

Chetty, Raj, and Saez, Emmanuel. Replication data for: Optimal Taxation and Social Insurance with Endogenous Private Insurance. Nashville, TN: American Economic Association [publisher], 2010. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-13. https://doi.org/10.3886/E114737V1

Project Description

Summary: We characterize welfare gains from government intervention when the private sector provides partial insurance. We analyze models in which adverse selection, pre-existing information, or imperfect optimization create a role for government intervention. We derive formulas that map existing empirical estimates into quantitative predictions for optimal policy. When private insurance generates moral hazard, standard formulas for optimal government insurance must be modified to account for fiscal externalities. In contrast, standard formulas are unaffected by "informal" private insurance that does not generate moral hazard. Applications to health and unemployment show that formal private market insurance can significantly reduce optimal government benefit rates. (JEL D82, G22, H21, H23, J65)

Scope of Project

JEL Classification:
      D82 Asymmetric and Private Information; Mechanism Design
      G22 Insurance; Insurance Companies; Actuarial Studies
      H21 Taxation and Subsidies: Efficiency; Optimal Taxation
      H23 Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
      J65 Unemployment Insurance; Severance Pay; Plant Closings

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V1 [2019-10-13]

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