Social Insurance and the Welfare State
Social Insurance and the Welfare State
Contents & Objectives:
The course aims at introducing the public provision of insurance in a modern welfare state
like Germany. Students will learn how the social budget has evolved over the last decades. We will discuss the basic theory of asymmetric information in insurance markets as well as structure of the public health and pension insurance in Germany. Economic policy is discussed with simple models, which highlight the central problems.
After completing the course, students will have an insight into the central motivation, institutions and regulations of social insurance in Germany. They will be able to identify and analyse economic policy problems using theoretical models.
Course Structure:
The Social budget in Germany and the European Union
Adverse Selection and Moral Hazard in Insurance Markets
Applied Theory: Asymmetric Information in Private Health Insurance and Genetic Testing
Insurance Function of the Welfare State
Social Norms and Social Insurance: Is the Welfare State self-destructive?
The Public Health Insurance System
Public intervention in health insurance markets – Motivation and problems
Pros and cons of private coinsurance in a social health insurance
The Public Pension System
Pension insurance in an OLG model
Welfare effects of funded and unfunded pensions
Optimal pension progressivity
Prerequisites:
Students that attend this course should have some basic knowledge in microeconomic theory.
Literature:
Eeckhoudt, L., C. Gollier and H. Schlesinger (2005): Economic and Financial Decisions under Risk, Princeton University Press, Princeton and Oxford.
Bhattacharya, J., T. Hyde and P. Tu (2014): Health Economics, Palgrave Macmillan, London.
D. Blake (2006): Pension Economics, John Wiley & Sons, Chichester.
Grading:
There will be an optional midterm examination and a 60-min final exam. Those who take the midterm exam can earn bonus points to improve their final grade.
