Martin Karlsson

• University of Duisburg-Essen

Health expenditure data almost always include extreme values, implying that the underlying distribution has heavy tails. This may result in infinite variances as well as higher-order moments and bias the commonly used least squares methods. To accommodate extreme values, we propose an estimation method that recovers the right tail of health expendi...

Despite the relatively uncontested importance of promoting school attendance in the policy arena, little evidence exists on the causal effect of school absence on long-run outcomes. We address this question by combining historical and administrative records for cohorts of Swedish individuals born in the 1930s. We find that elementary school absence...

We identify earnings impacts of exposure to an infant health intervention in Sweden, using individual-linked administrative data to trace potential mechanisms. Leveraging quasi-random variation in eligibility, we estimate that exposure was associated with higher test scores in primary school for boys and girls. However, only girls were more likely...

We revisit a Swedish comprehensive school reform first evaluated by Meghir and Palme (2005) (AER, 95(1):414‐424). This reform increased years of schooling and abolished tracking. We extend the original analysis to the full population and introduce an improved education measure. Our results confirm the original overall finding of small average earni...

We investigate two parallel school reforms in Sweden to assess the long-run health effects of education. One reform only increased years of schooling, while the other increased years of schooling but also removed tracking leading to a more mixed socioeconomic peer group. By differencing the effects of the parallel reforms we separate the effect of...

Intervening on modifiable risk factors to prevent dementia is of key importance since progress-modifying treatments are not available. Education is inversely associated with dementia risk, but causality and mechanistic pathways remain unclear. We aimed to examine causality of this relationship in Sweden using a compulsory schooling reform that exte...

To insure policyholders against contemporaneous health expenditure shocks and future reclassification risk, long-term health insurance constitutes an alternative to community-rated short-term contracts with an individual mandate. Relying on unique claims panel data from a large private insurer in Germany, we study a real-world long-term health insu...

We evaluate the impact on earnings, pensions, and further labor market outcomes of two parallel educational reforms increasing instructional time in Swedish primary school. The reforms extended the annual term length and years of compulsory schooling by comparable amounts. We find striking differences in the effects of the two reforms: at 5% the re...

This study re-examines standard econometric approaches for detecting adverse and advantageous selection in insurance contracts based on variables that are not used for calculating the insurance premium. We formally demonstrate that existing strategies for detecting selection based on such ‘unused characteristics’ can lead to incorrect conclusions i...

This study assesses the short and medium-term impact of extreme temperatures on population health and health-related costs in Germany. For 1999 to 2008, we link the universe of 170 million hospital admissions and all 8 million deaths with weather and pollution data at the day-county level. Extreme heat significantly and immediately increases hospit...

We study theoretically and empirically how consumers in an individual private long-term health insurance market with front-loaded contracts respond to a newly mandated portability requirement of their old-age provisions. To foster competition, effective 2009, the German legislature made the portability of standardized old-age provisions mandatory....

Although end-of-life medical spending is often viewed as a major component of aggregate medical expenditure, accurate measures of this type of medical spending are scarce. We used detailed health care data for the period 2009-11 from Denmark, England, France, Germany, Japan, the Netherlands, Taiwan, the United States, and the Canadian province of Q...

We study theoretically and empirically how consumers in an individual private long‐term health insurance market with front‐loaded contracts respond to a newly mandated portability requirement of their old‐age provisions. To foster competition, effective 2009, the German legislature made the portability of standardized old‐age provisions mandatory....

This paper investigates the potential of an infant intervention to improve life expectancy, contributing to emerging interest in the early life origins of chronic disease. We track individuals from birth to death, and are able to identify age and cause of death. The intervention was pioneered in Sweden in 1931–1933, and appears to have been pivotal...

Macroeconomic downturns can have an important impact on the receipt of informal and formal long-term care, since recessions increase the number of unemployed and affect net wealth. This paper investigates how the market for informal care changed during and after the Great Recession in Europe, with particular focus on their various determinants. We...

We use claims panel data from a big German private health insurer to provide detailed individual-level evidence on medical spending between 2005 and 2011. This includes evidence on the distribution of medical spending, the dependence of medical spending on age and other demographic characteristics, its persistence, and how medical spending evolves...

We discuss some issues associated with the empirical analysis of the relationship between socioeconomic status and health. We point out that, in addition to elaborate empirical modeling and good data, a conceptual framework is helpful both for making sense of one's own results and for the purpose of reconciling results across studies. We find that...

In this study, we estimate the effect of the HIV epidemic on demographic outcomes in three countries in Sub-Saharan Africa. We apply the synthetic control group method and estimate the consequences for life expectancy, mortality, and birth rates. According to standard measures of fit, the method seems to perform well for all countries and outcomes....

We study the impact of the 1918 influenza pandemic on short- and medium-term economic performance in Sweden. The pandemic was one of the severest and deadliest pandemics in human history, but it has hitherto received only scant attention in the economic literature - despite representing an unparalleled labour supply shock. In this paper, we exploit...

This article evaluates an expansion of employer‐mandated sick leave from 80% to 100% of forgone gross wages in Germany. We employ and compare parametric difference‐in‐difference (DID), matching DID and mixed approaches. Overall workplace absences increased by at least 10% or 1 day per worker per year. We show that taking partial compliance into acc...

This paper investigates the potential of maternal and infant health programs to improve the life expectancy of women and children. We study a program trialed in 1931-1933 in seven Swedish medical districts before it was rolled out at the national level in 1937, digitizing and assembling individual data from parish records and birth and death regist...

Theoretically, there are several reasons to expect education to have a positive effect on health. Empirical research suggests that education can be an important health determinant. However, it has not yet been established whether education and health are indeed causally related, and the effects found in previous studies may be partially attributabl...

In this paper we test the 'red herring' hypothesis for expenditures on long-term care (LTC). The main contribution of this paper is to assess the 'red herring' hypothesis by using the probability of dying as a measure for time-to-death (TTD). In addition, we implement models that allow for age-specific TTD effects on LTC utilization as well as sex-...

In Norway, municipalities have economic incentives for choosing residential care in nursing homes for high-income clients and home-based care for low-income clients. Using a three-year panel, 2007-2009, on 427 municipalities we provide an analysis of the effect of the Norwegian long-term care (LTC) financing system on the composition of LTC service...

We study the impact of the 1918 influenza pandemic on economic performance in Sweden. The pandemic was one of the severest and deadliest pandemics in human history, but it has hitherto received only scant attention in the economic literature – despite important implications for modern-day pandemics. In this paper, we exploit seemingly exogenous vari...

Our study reexamines standard econometric approaches for the detection of information asymmetries on insurance markets. We claim that evidence based on a standard framework with 2 equations, which uses potential sources of information asymmetries, should stress the importance of heterogeneity in the parameters. We argue that conclusions derived fro...

The Scandinavian countries — Denmark, Norway and Sweden — share a common history and common political traditions, which has led to very similar systems for social care being introduced in the three countries. This applies to the division of roles and responsibilities between different public bodies, as well as for the national policy objectives tha...

It has been established that morbidity increases with age, which leads to a reduction in labour productivity and an increase in care costs. However, in the health economic literature, it is sometimes argued that an individual’s age is not a good predictor of morbidity and care costs once ‘time to death’ is taken into account. In other words, age it...

In this paper we test the 'red herring' hypothesis for expenditures on long-term care. The main contribution of this paper is that we assess the 'red herring' hypothesis using an aggregated measure that allows us to control for entering the final period of life on the individual level. In addition we implement a model that allows for age specific t...

An ageing population and increased longevity means that long term care will become progressively more expensive. In 2009 the Government published a Green Paper on future funding options and a White Paper in 2010. This article considers the role of private finance products under the 'Partnership' option. It finds that few households are able to pay...

At the beginning of June 2010, the conference 'Health. Happiness. Inequality. Modelling the Pathways between Income Inequality and Health' was held in Darmstadt, Germany. Invited speakers and presenters traveled from all over the world; and researchers from several different subdisciplines were represented at the conference. The common denominator...

This study estimates the reform effects of a reduction in statutory sick pay levels on sickness absence behavior and labor costs. German federal law reduced the legal obligation of German employers to provide 100% continued wage pay for up to six weeks per sickness episode. In 1996 statutory sick pay was decreased to 80% of foregone gross wages. Wi...

In this paper, we compare and analyse the systems for financing long-term care for older people in the Scandinavian countries – Denmark, Norway and Sweden. The three countries share common political traditions of local autonomy and universalism, and these common roots are very apparent when the financing of long-term care is concerned. Nevertheless...

This paper uses a unique dataset-containing information collected in 2006 on individuals aged 40-79 in 21 countries throughout the world to examine whether individual income, relative income in a reference group, and income inequality are related to health status across middle/low and high-income countries. The dependent variable is self-assessed h...

A life table is a table which shows, at each age, the probability that a person in a given population will die before their next birthday. It can be used to calculate life expectancy and healthy life expectancy for people of different ages. In this work, using longitudinal datasets and panel data methods, we produce life tables for different subgro...

Seminal papers on asymmetric information in competitive insurance markets, analyzing the monetary deductible as a screening device, show that any existing equilibrium is of a separating type. High risks buy complete insurance, whereas low risks buy partial insurance-and this result holds for the Nash behavior as well as for the Wilson foresight. In...

Several recent studies have found a negative relation between government size and economic growth in rich countries. Since countries with big government have experienced above average improvements in both the Economic freedom index and the KOF globalization index, we argue that existing studies suffer from an omitted variable problem. Using Bayesia...

Most developed countries’ populations are ageing rapidly with consequent implications for public spending on long-term care (LTC), pensions and health care. The UK dependency ratio (the number of retired people per 100 people of working age) is projected to increase from 24 today to 38 in 2040. Although substantial, the increase is lower than in ma...

This article evaluates an expansion of employer-mandated sick leave from 80 to 100 percent of forgone gross wages in Germany. We employ and compare parametric difference-in-difference (DID), matching DID, and mixed approaches. Overall workplace attendance decreased by at least 10 percent or 1 day per worker per year. We show that taking partial com...

In this paper, we analyse the role of knowledge in an individual's pro-duction of health. We investigate the importance of various factors which potentially inuence an individual's decision to seek health related knowl-edge, and then estimate what impact such knowledge has on individual health. Using a cross-sectional dataset of middle-aged and old...

This paper analyses whether GPs in a capitation system have incentives to provide quality even though health is a credence good. A model is developed where the quality of the service varies due to inherent differences between the GPs and rational patients make choices based on the outcome of treatment. We find that it is difficult to provide approp...

This paper compares long term care (LTC) systems in four OECD countries (UK, Japan, Sweden and Germany). In the UK, provision is means tested, so that out of pocket payments depend on levels of income, savings and assets. In Sweden, where the system is wholly tax-financed, provision is essentially free at the point of use. In Germany and Japan, pro...

The purpose of this paper is to analyse the future sustainability of the UK system for provision of long-term care (LTC) due to changes in demography and health status among the older people. It considers how demand for LTC will evolve and to what extent there will be sufficient supply to meet demand. For formal care, this requires an estimate of h...

This report analyses the future sustainability of the British system for provision of long-term care (LTC) and compares it with the long term care systems in four other OECD countries (USA, Japan, Sweden and Germany). In the UK, provision is means tested, so that out of pocket payments depend on levels of income, savings and assets. In Sweden, wher...

A life table is a table which shows, at each age, the probability that a person in a given population will die before their next birthday. It can be used to calculate life expectancy and healthy life expectancy for people of dierent ages. In this work, using longitudinal datasets and panel data methods, we produce life tables for dierent subgroups...

In this study, we estimate the effects of the HIV pandemic on economic performance in the most heavily affected countries. With reference to an augmented Solow model and the empirical growth literature, we suggest a new method for identification which is based on synthetic control groups. Our results show that the AIDS pandemic has had a considerab...