Journal of Insurance and Finance 2021 KCI Impact Factor : 0.67

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pISSN : 2384-3209

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2014, Vol.25, No.4

  • 1.

    An Analysis of the Effects of an Estimated National Pension Wealth on an Individual’s Expected Retirement Income Replacement Rate -Focusing on an Estimation Method-

    Honsoo Kim , Ki-Hong Choi | 2014, 25(4) | pp.3~34 | number of Cited : 7
    Abstract PDF
    This research has mainly focused on two aspects. The one is that we have applied a new panel regression originated from Fullerton and Rogers (1993) to solve the problems which previous research had found in terms of estimating the expected retirement income replacement rate (ERR). Therefore, we combined Korean Labor & Income Panel Study with the National Pension's historical data of the insured. The other is that we have evaluated the effect of the expected National Pension benefits on the individuals' retirement income and the ERR. The ERR of the income quintile and cohorts respectively increases by average 14.4%p and 14.1%p when the expected National Pension benefits are added to the individually annuitized retirement income. Even though there are some methodological issues to combine two data sets, this research can give a possible solution to overcome data limitation to estimate the ERR and the expected NP benefits. We can more accurately estimate the average lifetime income and contribution periods using by the National Pension's historical data of the insured, and also show that there is possible way to combine two data sets based on income classes and age structure in more systematical and relevant manner.
  • 2.

    Recognition of Cancer Risk and Consumption of Cancer Insurance-Possibility of Adverse Selection-

    김대환 | 2014, 25(4) | pp.35~62 | number of Cited : 10
    Abstract PDF
    People tend to depend on the cancer insurance, provided by the insurers since burdens of high medical costs and risk of losing a job, caused by high cancer morality and prevalence rage. Although the market size of cancer insurance has increased rapidly, the insurers have stopped providing the cancer insurance due to the high loss ration. It has been implicitly concluded that the high loss ratio in the cancer insurance is caused by the high cancer prevalence rate and active examination of the cancer without definite studies. As indicated by the results with theoretical analyses, the loss ratio could be higher than the potential loss ratio expected by the insurers if there exists adverse selection caused by the asymmetric information between the insured and insurers about the potential insured’s health status. This study aims to investigate whether the potential insured apply their private information about the possibility of facing cancer diseases for consuming a cancer insurance. In order to investigate empirically the behaviors of the potential insured, it is essential to control the endogeneity such as selection bias using a panel data. The results from the propensity score matching analysis show that the high likelihood of getting cancer estimated based on the general population does not lead to consumption of cancer insurance. However, interestingly, the high likelihood of getting cancer estimated based on themselves leads to consumption of cancer insurance.
  • 3.

    Hidden Effect of Monetary Surprises on US Unemployment

    Yoo, Jae-in | 2014, 25(4) | pp.63~98 | number of Cited : 1
    Abstract PDF
    This paper studies the impact on the change in fed funds rate held by U.S FOMC. In analyzing the interest rate policy’s impact on the output indicator and unemployment, I studied stylized facts from both long-run and short-run analyses. The significant impact on the monetary policy in changing output growth and the unemployment rate is found in the crouching vector error correction model, which considers the asymmetric shape of long-run equilibrium. In the short-run analysis, I also found significant evidence that the unexpected change in the fed funds rate has the significant impact on unemployment. To measure the pure surprising factor of the change in fed funds rate, I extract the surprising factor after eliminating the fed funds futures rate from the total change in the fed funds rate. The interest rate policy’s significance is shown in the crouching ordinary least squares model, consisting of decomposed surprises, percentage change in price levels, and unemployment in two directions, increase and decrease. The short-run results show that when a monetary authority surprises a market by increasing the fed funds rate higher than expected (a contractional policy), the unemployment rate increases.
  • 4.

    Corporate Social Responsibility Activities, Dividend Policy, and Firm Value

    LEE JI HYE , Byun, Hee Sub | 2014, 25(4) | pp.99~141 | number of Cited : 6
    Abstract PDF
    This paper investigates the effect of corporate social responsibility (CSR) activities and dividend policy on the firm value. Empirically, we confirm that the positive effect of CSR on the firm value is strongly observed in firms with high dividend payout. This implies that shareholders (or investors) grant relatively high value to the CSR activities only when they are guaranteed by the proper monetary compensation such as dividends. We can interpret this result that the dividend is considered as a bonding mechanism for CSR, which can be abused by managers and cause the agency problems. This result is robust after controlling the endogeneity problems and employing the environmental management activities as alternative measures for CSR. Additionally, our results is strongly observed in firms with weak corporate governance structure, as the bonding role of dividend payout would be prominent in those firms. Our results have an important strategical implications on how the firms establish their financial policies such as CSR and dividends to maximize the firm value.