| My Dissertation spans the area of the economics of the life-cycle with applications to demand for medical care and public health insurance.;In Chapter 1, I develop a life-cycle model of optimal consumption and medical expenditures with longevity and health uncertainties. The stock of health, like the stock of capital, deteriorates overtime, and its accumulation process may involve random shocks. Without medical insurance, individuals have an incentive to save to self-insure against future adverse health shocks. Numerical analysis is employed to estimate the life-cycle profiles of optimal consumption and medical expenditures. Health status influences not only individuals' decisions on medical expenditures, but, also their consumption. The policy function indicates that both current consumption and medical expenditures decrease with health status as healthier individuals have a longer horizon in which to save. In addition, the ratio of medical expenditures to total expenditures decreases with individuals' initial health status and initial assets.;In Chapter 2, I compute medical insurance contracts that maximize individual expected lifetime utility. The methodology used to calculate the optimal medical insurance contract is based on the model of optimal consumption and medical expenditures developed in Chapter 1. The government hypothetically acts as an insurance company in a competitive medical insurance industry---it collects taxes earmarked for medical services. The optimal medical insurance contracts are actually fair and designed to take care of moral hazard problems. With medical insurance, individuals spend more on medical care and save less financial assets. In Chapter 3, I evaluate generational impacts of Thailand's National Health Security policy using generational accounts. As generational accounts allow us to determine the burden of fiscal policy that fans on different generations, I compare generational accounts under the existing policy, in which medical care is supported by general tax revenue, to those of the self-financing, medical insurance policy calculated in Chapter 2. I find that the existing national health security policy is less favorable to future generations than the policy constructed in Chapter 2. |
