Essays on social and private insurance

Social insurance has been increasingly challenged by aging of the population, changes in family structure, increased mobility of workers and firms, and a greater importance of self-employment. These social and economic changes call for a more appropriate design of social insurance both in its financing and its manner of providing. The assessment of the private market alternative is thereby unavoidable. Currently, it is regarded as a better option by societal factions either unhappy with the implicit redistribution of social insurance or with its coverage. Being universal, compulsory, and uniform, social insurance leaves, indeed, individuals little freedom of choice. The first chapter of this thesis calls attention to the eventual loss of welfare induced by the possibility of supplementing social coverage in the market. Since the possibility of topping up changes individuals' preferences for social insurance, it can be elected as a benefit linked to past earnings instead of the minimum uniform one. In such a case, the loss of welfare is not offset by the potential of the market when the poor are considerably more likely to face situations of unemployment, disability or sickness. The compulsoriness of social insurance is addressed in the second chapter where it is shown that a voluntary social insurance always survives because there will always be individuals benefiting from redistribution with respect to risk and income. Additionally, the existence of social insurance per se increases the efficiency of the health insurance market mitigating the effects of adverse selection. Consequently, there is no opposition to social insurance coverage and sometimes there is even unanimity for full social coverage. In the absence of social and private insurance individuals can still insure themselves. This is the topic of the third chapter in which a pool of promises in a moral hazard setup are studied. It turns out to be possible that a pool of promises between rich and poor Pareto dominates the two segregated pools.Doctorat en sciences économiques (ECON 3)--UCL, 200