Research
Journal articles
Rising inequality and the implications for the future of private insurance in Canada
(Joint with Mark Stabile: Health Economics, Policy and Law (2018), 13: 406-432)
Abstract: Income and wealth inequality have risen in Canada since its low point in the 1980s. Over that same period we have also seen an increase in the amount that Canadians spend on privately financed health care, both directly and through private health insurance. This paper explores the relationship between these two trends using both comparative data across jurisdictions and household level data within Canada. It will then outline the implications for the future of private insurance in Canada. The starting hypothesis is that the greater the level of inequality the more difficult it becomes for publicly provided insurance to satisfy the median voter. Thus, we should expect increased pressure to access privately financed alternatives as inequality increases. In the light of our findings, the paper considers the implications of growing inequality on the future of private health insurance in Canada.
Working papers
Local inequality and departures from publicly provided healthcare in Canada
(joint with Mark Stabile)
Abstract: This paper examines how changes in the inequality of income distribution can affectthe provision of resources in a healthcare system, and hence this public-private mix.Specifically, we investigate whether increases in income inequality, as separate from overallincome levels and growth, have changed the availability of both private clinics and privatelyfinanced physicians in a context where the dominant market player is the public system. Ourfindings provide reasonable evidence that increases in income inequality have led to substantialincreases in both. We find that moving from median level of inequality across neighbourhoodsto the top one percent levelof inequality increases the probably of a private clinic by 60% andthe probability of having physicians who have opted out of the public system by 180%
Physician Incentives and the rise in C-sections: Evidence from Canada
(Joint with Sara Allin, Michael Baker and Mark Stabile. Previous iteration as NBER working paper )
Abstract: Drawing on comprehensive administrative records of nearly 4 million births in Canada between 1994 and 2011 as well as macro data from the US and Australia, we provide an account of rising C‑section rates investigating the contributions of the changing characteristics of mothers, births and physicians, as well as changing incentives in how doctors are paid for deliveries. Changes in the characteristics of mothers and births, as well as growth in the share of deliveries performed by specialists account for at most one-half of the increase in C‑section rates. In contrast, we find that trends in fee incentives play little role. Finally, the majority of the remaining increase in C‑sections over the period 1994-2011 occurred in the early 2000s. We overview the relative contributions the Hannah Breech Trial and technological change may have played in this development.
Meeting the target? The impact of targeted financial incentives on primary care physicians' labour supply
Abstract: This paper investigates primary care physicians' responses to targeted incentives. While these incentives are a common tool employed by governments to try to influence the delivery of health care, especially primary care, the nature and range of their effects are complex. Both theory and existing empirical evidence suggest that increasing the payment for a medical act does not necessarily lead physicians to increase their provision of the targeted procedure. Moreover, given the relatively broad scope of primary care physicians' practice, their responses to specific bonuses or premiums may also include changes to their activities in areas of care that are not directly targeted by the incentives. Exploiting the introduction of a premium that increased the remuneration for obstetric care in Ontario, I find that primary care physicians did not increase their provision of the services targeted by the premium following its introduction. On the contrary, doctors who were initially providing higher volumes of those services adjusted their provision downwards in response to the incentive. The results also suggest that the incentive might have negatively affected the provision of services in other areas of care by primary care physicians receiving the premium. These changes in practice style are in line with the predictions of a labour supply model in which income effects are relatively strong. At a time when health care budgets are growing at a pace that is often qualified as unsustainable, this paper contributes to understanding the potential broader impacts of targeted financial incentives on the delivery of care, and their alignment with governments' objectives.
From C-section to Health Conditions: Are Children's Health Outcomes Influenced by Birth Delivery Methods?
Abstract: Caesarean section rates have risen steadily across the OECD in the past two decades. In the United states and in Canada, they have reached levels nearly twice as high as the benchmark suggested by the World Health Organization. Among the potential consequences of this trend, the impact of C-section birth on health outcomes in childhood has attracted the attention of both the media and the scientific community. Research conducted in clinical settings suggests that a caesarean birth would affect the composition of an infant's intestinal microbiota in his first days of life, with the potential impact of impeding the development of his immune system. However, studies using observational data to investigate the relationship between C-section birth and health outcomes later in childhood offer mixed findings, some confirming and others casting doubts on the association between both phenomena. In this paper, I use individual-level data on Canadian infants born between 1994 and 2006, and follow them from pregnancy through childhood to investigate the causal impact of C-section deliveries on health outcomes in childhood, and to assess its importance at a population level. To account for the endogeneity between health and birth delivery method, I employ an instrumental variables approach exploiting physicians' response to financial incentives. I use the relative payment received by physicians for a C-section, which varies exogenously across Canadian provinces and through time, to instrument for the probability that a newborn is delivered by C-section. This identification strategy yields a local average treatment effect corresponding to the impact unnecessary C-sections on children's outcomes (chronic conditions, hospitalizations, minor ailments and overall health status). From a public policy perspective, this estimate is particularly interesting: the long term harmful consequences of unnecessary C-sections being weighted against weaker short-term benefits.
(joint with Mark Stabile)
Abstract: This paper examines how changes in the inequality of income distribution can affectthe provision of resources in a healthcare system, and hence this public-private mix.Specifically, we investigate whether increases in income inequality, as separate from overallincome levels and growth, have changed the availability of both private clinics and privatelyfinanced physicians in a context where the dominant market player is the public system. Ourfindings provide reasonable evidence that increases in income inequality have led to substantialincreases in both. We find that moving from median level of inequality across neighbourhoodsto the top one percent levelof inequality increases the probably of a private clinic by 60% andthe probability of having physicians who have opted out of the public system by 180%
Physician Incentives and the rise in C-sections: Evidence from Canada
(Joint with Sara Allin, Michael Baker and Mark Stabile. Previous iteration as NBER working paper )
Abstract: Drawing on comprehensive administrative records of nearly 4 million births in Canada between 1994 and 2011 as well as macro data from the US and Australia, we provide an account of rising C‑section rates investigating the contributions of the changing characteristics of mothers, births and physicians, as well as changing incentives in how doctors are paid for deliveries. Changes in the characteristics of mothers and births, as well as growth in the share of deliveries performed by specialists account for at most one-half of the increase in C‑section rates. In contrast, we find that trends in fee incentives play little role. Finally, the majority of the remaining increase in C‑sections over the period 1994-2011 occurred in the early 2000s. We overview the relative contributions the Hannah Breech Trial and technological change may have played in this development.
Meeting the target? The impact of targeted financial incentives on primary care physicians' labour supply
Abstract: This paper investigates primary care physicians' responses to targeted incentives. While these incentives are a common tool employed by governments to try to influence the delivery of health care, especially primary care, the nature and range of their effects are complex. Both theory and existing empirical evidence suggest that increasing the payment for a medical act does not necessarily lead physicians to increase their provision of the targeted procedure. Moreover, given the relatively broad scope of primary care physicians' practice, their responses to specific bonuses or premiums may also include changes to their activities in areas of care that are not directly targeted by the incentives. Exploiting the introduction of a premium that increased the remuneration for obstetric care in Ontario, I find that primary care physicians did not increase their provision of the services targeted by the premium following its introduction. On the contrary, doctors who were initially providing higher volumes of those services adjusted their provision downwards in response to the incentive. The results also suggest that the incentive might have negatively affected the provision of services in other areas of care by primary care physicians receiving the premium. These changes in practice style are in line with the predictions of a labour supply model in which income effects are relatively strong. At a time when health care budgets are growing at a pace that is often qualified as unsustainable, this paper contributes to understanding the potential broader impacts of targeted financial incentives on the delivery of care, and their alignment with governments' objectives.
From C-section to Health Conditions: Are Children's Health Outcomes Influenced by Birth Delivery Methods?
Abstract: Caesarean section rates have risen steadily across the OECD in the past two decades. In the United states and in Canada, they have reached levels nearly twice as high as the benchmark suggested by the World Health Organization. Among the potential consequences of this trend, the impact of C-section birth on health outcomes in childhood has attracted the attention of both the media and the scientific community. Research conducted in clinical settings suggests that a caesarean birth would affect the composition of an infant's intestinal microbiota in his first days of life, with the potential impact of impeding the development of his immune system. However, studies using observational data to investigate the relationship between C-section birth and health outcomes later in childhood offer mixed findings, some confirming and others casting doubts on the association between both phenomena. In this paper, I use individual-level data on Canadian infants born between 1994 and 2006, and follow them from pregnancy through childhood to investigate the causal impact of C-section deliveries on health outcomes in childhood, and to assess its importance at a population level. To account for the endogeneity between health and birth delivery method, I employ an instrumental variables approach exploiting physicians' response to financial incentives. I use the relative payment received by physicians for a C-section, which varies exogenously across Canadian provinces and through time, to instrument for the probability that a newborn is delivered by C-section. This identification strategy yields a local average treatment effect corresponding to the impact unnecessary C-sections on children's outcomes (chronic conditions, hospitalizations, minor ailments and overall health status). From a public policy perspective, this estimate is particularly interesting: the long term harmful consequences of unnecessary C-sections being weighted against weaker short-term benefits.
Work in progress
Is it all relative? The health impact of changes to absolute and relative income
(joint with Boriana Miloucheva)
Abstract: The feeling of falling behind has been identified in recent research as a potential factor behind the rise in morbidity and mortality among certain population groups in developed economies, such as the US and Canada. Improving our understanding of such dynamics is important, but identifying the health effects of changes to people's relative economic situation separately from the health impact of changes to their absolute level of income is not straightforward. First, both absolute and relative income are likely endogenous inputs in the health production function. Second, changes to individuals' absolute income levels often simultaneously affect their position within the income distribution. To address these challenges, this paper proposes an empirical strategy that draws on the importance and geographic concentration of the extractive industry in Canada. To deal with the potential reverse causality characterizing the relationship between health and income, we exploit exogenous movements in the price of oil, which predominantly affect the earnings of workers in the extractive industry. Oil price variations further induce different combinations of changes to absolute and relative income across individuals, based on their own labour market activity and on the share of their neighbours employed in the extractive industry. Using hospitalization records linked to census data, we capitalize on these combinations to investigate the extent to which people's absolute and relative income trajectories separately contribute to the development of severe health conditions and to the utilization of inpatient care. Our results shed new light on mechanisms through which income inequality might affect people's well-being.(Draft available soon)
Capsule vidéo (French)
Wage gaps between Francophones and Anglophones in Quebec, 1970 to 1990: A cohort approach
(joint with Julien Gagnon and Vincent Geloso)
Abstract: The wage gap between francophones and anglophones in Quebec closed between 1970 and 1990. In this paper, we unveil a new related empirical fact: the wage gap was already closing by 1970 for younger, more educated cohorts. This empirical fact sheds some new light on the findings presented in the existing literature on the evolution of wage differentials between linguistic groups in Quebec. To explain the cohort-specific dynamics observed in the data, we propose a model based on a two-sector economy, where each sector is characterized by the use of a language and where agents in each sector can invest in education or in capital. We show that with imperfect mobility of labor and perfect mobility of capital, and when the costs of education are neither too high nor too low, there exists an asymmetric equilibrium whereby agents in only one sector invest in education. The resulting difference in the productivity of labour across sectors drives capital flows from the low-education to the high-education sector. Capital flows, in turn, generate a differential in the marginal productivity of labor between the two sectors. In this model, a public policy of mandatory education – such as the one adopted in Quebec in 1943 – can however pull the economy from this asymmetric equilibrium and towards a symmetric one, contributing to close the wage gap between the groups. Our theory is consistent with the birth cohort approach and is in line with important stylized facts of the economic history of Quebec. (Draft available soon)
Impact de subventions sur la consommation d’aide domestique: résultats d’une expérience quasi-naturelle
(joint with Siramane Coulibaly and Bernard Fortin)
CIRANO commentary (French)
(joint with Boriana Miloucheva)
Abstract: The feeling of falling behind has been identified in recent research as a potential factor behind the rise in morbidity and mortality among certain population groups in developed economies, such as the US and Canada. Improving our understanding of such dynamics is important, but identifying the health effects of changes to people's relative economic situation separately from the health impact of changes to their absolute level of income is not straightforward. First, both absolute and relative income are likely endogenous inputs in the health production function. Second, changes to individuals' absolute income levels often simultaneously affect their position within the income distribution. To address these challenges, this paper proposes an empirical strategy that draws on the importance and geographic concentration of the extractive industry in Canada. To deal with the potential reverse causality characterizing the relationship between health and income, we exploit exogenous movements in the price of oil, which predominantly affect the earnings of workers in the extractive industry. Oil price variations further induce different combinations of changes to absolute and relative income across individuals, based on their own labour market activity and on the share of their neighbours employed in the extractive industry. Using hospitalization records linked to census data, we capitalize on these combinations to investigate the extent to which people's absolute and relative income trajectories separately contribute to the development of severe health conditions and to the utilization of inpatient care. Our results shed new light on mechanisms through which income inequality might affect people's well-being.(Draft available soon)
Capsule vidéo (French)
Wage gaps between Francophones and Anglophones in Quebec, 1970 to 1990: A cohort approach
(joint with Julien Gagnon and Vincent Geloso)
Abstract: The wage gap between francophones and anglophones in Quebec closed between 1970 and 1990. In this paper, we unveil a new related empirical fact: the wage gap was already closing by 1970 for younger, more educated cohorts. This empirical fact sheds some new light on the findings presented in the existing literature on the evolution of wage differentials between linguistic groups in Quebec. To explain the cohort-specific dynamics observed in the data, we propose a model based on a two-sector economy, where each sector is characterized by the use of a language and where agents in each sector can invest in education or in capital. We show that with imperfect mobility of labor and perfect mobility of capital, and when the costs of education are neither too high nor too low, there exists an asymmetric equilibrium whereby agents in only one sector invest in education. The resulting difference in the productivity of labour across sectors drives capital flows from the low-education to the high-education sector. Capital flows, in turn, generate a differential in the marginal productivity of labor between the two sectors. In this model, a public policy of mandatory education – such as the one adopted in Quebec in 1943 – can however pull the economy from this asymmetric equilibrium and towards a symmetric one, contributing to close the wage gap between the groups. Our theory is consistent with the birth cohort approach and is in line with important stylized facts of the economic history of Quebec. (Draft available soon)
Impact de subventions sur la consommation d’aide domestique: résultats d’une expérience quasi-naturelle
(joint with Siramane Coulibaly and Bernard Fortin)
CIRANO commentary (French)