06 - The environment influencing the provision of health, social and employee benefits Flashcards
Define “burden of disease” in a public health context, and explain how it is measured.
The burden of disease refers to the overall impact of diseases and injuries on a population, considering factors like prevalence, severity, and consequences. It’s measured using:
Years of Life Lost (YLL): Measures premature mortality.
Years Lived with Disability (YLD): Measures the number of years lived with a disability or health condition.
Disability-Adjusted Life Years (DALYs): A combination of YLL and YLD providing a comprehensive measure.
List and explain four ways medical advances have impacted the burden of disease.
Improved prevention and health promotion: Better understanding of risk factors leads to effective strategies.
Early detection and diagnosis: Advanced diagnostic techniques allow for earlier and more accurate detection of diseases.
Innovative treatments: More effective treatments reduce disease duration and hospital stays.
Management of chronic conditions: Medical and technological advances help individuals manage their health and avoid long-term complications.
Reduced mortality: Increased survival rates result in reduced YLL.
Shift to geriatric care: Medical advances have shifted the burden of disease toward the management of chronic conditions and medical care for older people.
What are the the three components of demographic change? How do they influence population structures?
Mortality: Generally, the most stable component; measured in terms of life expectancy.
Fertility: More variable than mortality; influenced by social and economic factors; measured by the age-specific fertility rate and the total fertility rate (TFR).
Net migration: Difficult to model; affected by economic opportunities, war, and political reasons.
These components influence how long people live, how many children they have, and how they move, shaping the population structure.
Describe the three stages of the demographic transition.
Stage 1: Decline in mortality: Reduction in mortality at all ages, especially infant mortality; population may grow and the average age may drop.
Stage 2: Decline in fertility: Child mortality rates decline; population continues to grow but at a decreasing rate; increase in the old-age dependency ratio.
Stage 3: Mortality and fertility in balance: Both are in balance but at much lower levels, leading to a near zero rate of population growth; the working-age population will start declining.
Explain the concept of a “population pyramid” and describe the different shapes.
A population pyramid is a histogram that shows the distribution of various age groups in a population, split by sex. Different shapes include:
Stable: Fairly neat triangle shape.
Expansive: J-shaped, indicates a rapidly growing population.
Stationary: Cap-shaped, associated with the end of demographic transition.
Contracting: Bulb or mushroom-shaped, indicating a declining population.
What are “demographic shocks”? Give examples of how they impact population pyramids.
Demographic shocks are sudden changes in mortality, fertility, or migration. Examples include:
Mortality shocks
War or disease (like pandemics) can cause a noticeable reduction in specific age groups.
Example
A mortality shock in the Italian data is observable between the ages of 60 and 64, and the low number of men relative to women due to World War I and II.
Fertility shocks
Changes due to political events or access to contraception may impact the birth rate and the number of young people in the population.
Example
The banning and unbanning of contraception in Ireland caused a fluctuation in the number of children.
Migration shocks
Large scale movement can change the age structure of the population in the affected areas.
What is the Gini coefficient? How is it used?
The Gini coefficient measures income inequality. It ranges from 0 (perfect equality) to 1 (perfect inequality). The higher the Gini coefficient, the greater the area between the line of perfect equality and the actual distribution of income in a society.
Explain the concept of the “paradox of thrift.”
The paradox of thrift states that if everyone in a closed economy tries to save more, the total savings may fall because one person’s consumption is another person’s income. Reduced consumption reduces overall income, and therefore the ability to save.
Describe the three main actors in an economy and their interactions in markets.
- Households: Consume goods and services, sell their labour to firms.
- Firms: Buy labour and capital to produce goods and services.
- The state: Levies taxes and uses them for transfer payments.
These actors interact in the goods markets, labour markets, and capital markets.
Explain the concept of “Ricardian equivalence”.
Ricardian equivalence states that under certain idealised conditions, it makes no difference whether a state finances expenditure by raising taxes today or by borrowing from capital markets and repaying the debt with taxes in the future.
Key requirements include:
* Individuals value the welfare of their successors
* Markets are perfect
* Path of state expenditure does not depend on current or future taxes.
How does the political environment influence the provision of health, social, and employee benefits?
The political system impacts policy decisions about healthcare and welfare. Factors include:
Electoral cycles
Governments may focus on short-term benefits to win elections, even if they are unsustainable in the long term.
Political stability
Stable political environments are more attractive to foreign investment, and are important for policy stability.
Public perceptions
Perceptions of inequality or poor economic performance may affect election outcomes, influencing policy.
Political ideology
Different political parties may have differing views on the role of the state.
Describe how an ageing population affects healthcare costs and retirement benefits.
Healthcare
Healthcare costs increase with age, especially for chronic and non-communicable diseases, creating a larger need for retirement savings if not covered by the state.
Retirement
The increasing proportion of older people makes it more expensive to maintain state pensions and healthcare benefits. This can be a threat to the sustainability of benefit systems.
Explain how a mandatory enforced saving scheme affects the supply of capital, real interest rates, and wage rates.
Supply of capital
Mandatory savings may increase the supply of capital if the funding increases savings and capital investment, but this effect is not certain.
Real interest rate
Increased saving may lead to lower real interest rates because there is more money available for borrowing.
Wage rates
Increased capital investment might lead to decreased demand for labour and may cause wages to fall.
What is the impact of inflation on benefits, particularly retirement benefits?
- Inflation erodes the purchasing power of benefits, especially fixed pensions.
- Expenses may increase at a rate different from salaries, impacting affordability.
- Medical costs, which increase with age, tend to rise faster than general inflation.
How does the time horizon of state-provided benefits compare to that of an elected government? What is a result of this difference?
The time horizon for state-provided benefits is long, whereas that of an elected government is typically short (4-5 years). This mismatch can result in governments expanding benefit programs to win votes, even if they are unsustainable in the long run.
