Individual unemployment accounts (IUAs) attenuate the moral hazard attached to unemployment insurance. However, the available literature provides no policy recommendation about what percentage of the contributions should go to IUAs. We propose criteria of actuarial neutrality and use a simple...

This paper shows that optimal unemployment insurance contracts are age-dependent. Older workers have only a few years left on the labor market prior to retirement. This short horizon implies a more digressive replacement ratio. However, there is a sufficiently short distance to retirement for...

In this paper, I explore how optimal aggregate dynamics can be shaped by the presence of moral hazard in unemployment insurance. I also analyze the optimal provision of unemployment insurance and the implications for the amount of cross-sectional heterogeneity. The economy that I consider embeds...

Would you go to the dentist more often if it were free? Observational data is here used to analyze the impact of full-coverage insurance on dental care utilization using different identification strategies. The challenge of assessing the bite of moral hazard without an experimental study design...

This paper reviews and evaluates the empirical literature on adverse selection in insurance markets. We focus on empirical work that seeks to test the basic coverage - risk prediction of adverse selection theory - that is, that policyholders who purchase more insurance coverage tend to be...

Adverse selection and moral hazard are different types of information asymmetry in the insurance market, but their empirical evidence cannot be separated using the traditional positive risk-coverage correlation test. In this paper, we use a new method to disentangle adverse selection and moral...

The identification of information problems in different markets is a challenging issue in the economic literature. This paper performs tests of residual asymmetric information in the French automobile insurance market for the 1995-1997 period. This market is characterized by the presence of a...

This brief is actually going to have two levels. One level will go with the advertised title, and I’ll tell you my current views on the truth about moral hazard and adverse selection. Adverse selection will serve as somewhat of a handmaid of moral hazard, as you will see. That’s one level....