The welfare effects of innovative pharmaceuticals: an international perspective from the Dutch experience

Policy discussions on new medicines are often focused on cost containment rather than on the benefits they produce, such as health gains and cost savings in other sectors. In this study, we identify systematic differences in policies towards pharmaceuticals between countries and calculate the welfare gains of 39 innovative pharmaceuticals introduced in the Dutch market after 1997. Welfare gains are defined as the difference between the value of a QALY gained by innovative pharmaceuticals and their costs. The review shows that there are systematic differences among pharmaceutical policies and regulations between countries. It is further found that the welfare gains of pharmaceuticals are substantial and amount to €77 per capita per year in the Netherlands. The welfare gains could be higher if institutional barriers for an efficient utilization of innovative pharmaceuticals are removed.     

Labour,leisure and household income in rural settlements: an empirical assessment in the Atlantic Zone of Costa Rica

The relationship between labour use, the availability of leisure time and the generation of income in rural farm households is often depicted as an implicit or explicit trade-off. This article presents a review of current theories regarding the supply, demand and use of labour at farm household level, followed by an empirical assessment of time allocation of labour and the composition of farm household income in a sample of peasant households located in different types of agrarian settlements at the Atlantic Zone of Costa Rica. Structural determinants of labour use and leisure choice, as well as the relationship between household income and the availability of leisure are determined. Major differences in land use and labour allocation between settlements according to the period of colonization (old or recent) and the type of colonization (spontaneous or organized) are outlined. Small farms in organized settlements rely on labour-intensive cropping systems that guarantee higher incomes at the expense of leisure, while farms in spontaneous and more remote settlements still maintain labour-extensive production with reliance on wage labour. Empirical evidence points towards a clear trade-off between leisure-time and marginal income as well as possibilities for substitution of family labour by hired labour to increase leisure. Personal characteristics ( i.e. education, age, work attitudes) and farm characteristics ( i.e. location, farm size, lifetime) are identified as relevant factors to explain leisure choice.     

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Book reviews

     

THE EFFECTIVENESS OF ACTIVE LABOR MARKET POLICIES: A META‐ANALYSIS

This paper provides a meta‐analysis of microeconometric evaluation studies on the effectiveness of active labor market policies. The analysis is built upon a systematically assembled data set of causal impact estimates from 57 experimental and quasi‐experimental studies, providing 654 estimates published between January 1990 and December 2017. We distinguish between the short and longer term impacts in our analysis; at 6, 12, 24, and 36 months after program start. After correcting for publication bias and country‐specific macroeconomic characteristics, subsidized labor and public employment programs have negative short‐term impacts, which gradually turn positive in the longer run. Schemes with enhanced services including job‐search assistance and training programs do not have these negative short‐term effects, and stay positive from 6 until 36 months after program start.     

HORIZONTAL MISMATCH BETWEEN EMPLOYMENT AND FIELD OF EDUCATION: EVIDENCE FROM A SYSTEMATIC LITERATURE REVIEW

This paper provides a systematic review of the growing literature on the poor match between employees’ field degree and the job requirements, also referred to as horizontal mismatch. We identify the different definitions used in the literature and find that each measure of horizontal mismatch yields substantially different incidence rates. We discuss the validity of the different measures and conclude that a more uniform definition of horizontal mismatch is needed. The likelihood of horizontal mismatch is among other things determined by the extent to which employees possess general skills as opposed to occupation‐specific skills, and, it appears to be more frequently present among older workers. Compared to well‐matched employees, horizontally mismatched workers generally incur a wage penalty, are less satisfied with their jobs, and are more likely to regret their study programme. The ensuing findings offer guidance to prevent horizontal mismatch as well as a roadmap for future research.     

A META‐ANALYSIS ON THE RELATIONSHIP BETWEEN INCOME INEQUALITY AND ECONOMIC GROWTH

In recent years there is a growing interest in determining the impact of inequality on economic growth. Theoretical papers as well as empirical applications have, however, produced controversial results. Although there is a considerable part of the literature that considers inequality detrimental to growth, more recent studies have challenged this result and found a positive effect of inequality on growth. In this paper, we provide a contribution to the empirical puzzle by using meta‐analysis to systematically describe, identify and analyse the variation in outcomes of empirical studies. We find that estimation methods, data quality and sample coverage systematically affect the results. The results point out that it will be particularly useful to increasingly focus research on determining the impact of income inequality on economic growth using single‐country data at the regional level, or a relatively homogeneous set of countries with adequate controls for country‐wide differences in economic, social and institutional characteristics.     

Vested interests, population ageing and technology adoption

Technologies that are used differ vastly across and within countries. It is commonly observed that technologies that would improve productivity are not adopted. This paper explains the failure to adopt new technologies through costs of adoption for people of different age. We set out an overlapping generations model with majority voting that predicts a relationship between the age composition of an economy and economic growth. We also consider the effects of more intense competition on technology adoption.     

Match Specific Gains to Marriage: A Random Effects Ordered Response Model

A random effects ordered response model is used to analyze individuallife satisfaction. It is found that a substantial part of the unexplained variance in theindividual's life satisfaction can be ascribed to the household or marriage. It is further found thatthe age variable should be considered as a random effect on life satisfaction, i.e., an effectthat varies between households.     

Effects of health insurance on labour supply: evidence from the health care fund for the poor in Vietnam

The expansion of health insurance in emerging countries raises concerns about the unintended negative effects of health insurance on labour supply. This article examines the labour supply effects of the Health Care Fund for the Poor (HCFP) in Vietnam in terms of the number of work hours per month and labour force participation (the probability of employment). Employing various matching methods combined with a Difference-in-Differences approach on the Vietnam Household Living Standard Surveys 2002–2006, we show that the HCFP, which aims to provide poor people and disadvantaged minority groups with free health insurance, has a negative effect on labour supply. This is manifested in both the average number of hours worked per month and the probability of employment, suggesting the income effect of the HCFP. Interestingly, the effects are mainly driven by the non-poor recipients living in rural areas, raising the question of the targeting strategy of the programme.     

Union membership in the Netherlands: A cross-sectional analysis

In this paper we analyze the determinants of union membership in the Netherlands. Not only the unionization decision is studied, but also the decision which confederation the workers will join. Furthermore, a test is presented to determine the nature of the decision process; we ask whether the decision to join a union and the decision which confederation to join are sequential or simultaneous decisions. The answer is not only of consequence for the model specification, but also affects the conclusions drawn from the estimations. In our analysis we find a considerable number of significant variables, most of them with the expected sign. If a variable has an effect contrary to expectation this can largely be attributed to specific Dutch circumstances. This shows that a general theory on the determinants of union membership can never be wholly universal, but always has to allow for nationally determined exceptions. Our results further demonstrate the importance of careful specification of the structure of the decision process. The comparison of the results of the multinomial and the sequential logit model show that misspecification of the decision structure can lead to false conclusions. In the Netherlands, the decision to become a union member is taken prior to the decision which particular union to join.