By Browers Gerber Hickman

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Additional resources for Actuarial Mathematic, Second Edition

Example text

This act specifically forbade employers from contributing to union-controlled welfare funds. In their stead, it created Taft-Hartley Welfare Trust funds, managed jointly by labor and management to provide benefits to unionized workers. During periods of wage stagnation, unions bargained for increases in fringe benefits, including health insurance. Throughout World War II, wage increases were very limited under the government's price-stabilization program. Since government controls did not usually limit benefits for retirement, death, and health care, these programs grew rapidly and employers competed for workers by substituting insurance benefits for wage increases.

18 This is one rationale for subsidizing group medical expense benefits. Workers who have better health can provide immediate benefits to themselves and the firms for which they work by having greater mental acuity, strength, and stamina while on the job. Also, the life expectancy of the human capital stock will affect the number of productive future years for work and will thus materially affect the incentives for investment in human-capital enhancement. ,,19 Investments in maintaining health, preventing and curing sickness, increasing energy, and zest for living and working, and the lengthening of life, are productivity-enhancing and make labor more valuable to the firm.

Health care services may improve the productivity of workers, and so can be viewed as increasing the stock of human capital as investment outlays yield a continuing stream of improved productivity over the future. 18 This is one rationale for subsidizing group medical expense benefits. Workers who have better health can provide immediate benefits to themselves and the firms for which they work by having greater mental acuity, strength, and stamina while on the job. Also, the life expectancy of the human capital stock will affect the number of productive future years for work and will thus materially affect the incentives for investment in human-capital enhancement.

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Actuarial Mathematic, Second Edition by Browers Gerber Hickman


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