Unemployment and Health Insurance Coverage
Summary
Context for Use
This activity is appropriate for Principles, Introductory Microeconomics, and for elective courses such as Labor Economics and Development Economics.
Background knowledge on the topic can be supplemented through the materials listed in the "Information given to students." Instructors are encouraged to design Just-In-Time-Teaching questions to improve student preparation and target instruction (See here: https://serc.carleton.edu/econ/justintime/index.html).
Students must be able to follow directions on the GeoFRED site: search for data; modify the units; change the date range; choose map colors; and edit the legends.
To preserve class time for activities in which there is great benefit in face-to-face interaction, the instructor could copy the map-building instructions into a handout and assign that work as out-of-class preparation.
No class size limitations.Time needed for the activity: 30 minutes.
Should not need more one class period.
Self-standing activity.
Overview
Students search for data and visualize them in GeoFRED, the Federal Reserve Bank of St. Louis online mapping tool. The learning goals of this activity are: (1) to observe patterns in economic data and note differences across geographical areas; (2) hypothesize the reasons for those patterns and differences.
The intended outcome of the activity is the illustration of the relationship between unemployment and health insurance coverage and the potential explanations for this relationship.
Expected Student Learning Outcomes
In this exercise students will be able to:
1. Observe an inverse relationship between unemployment and health insurance coverage across U.S. census divisions;
2. Evaluate the reasons for the observed inverse relationship between unemployment and health insurance coverage.
Information Given to Students
Go to the following web address and watch the video: https://youtu.be/-58VD3z7ZiQ
On the GeoFRED website, https://geofred.stlouisfed.org/, create a map by following these instructions:
1. Click on "Build New Map"
2. Click on "Tools"
3. Click on "Choose Data" and select "Region Type: Census Division"
4. Select "Data: Unemployed Persons"
5. Select "Date: 2009"
6. Select "Units: Percent Change from Year Ago"
7. Click on "Choose Colors" and select "Single Hue: reds"
8. Click on "Edit Legend" and select "Number of Color Classes: 2"
9. Enter "0" in the top value box and "100" in the bottom value box.
Open a new tab browser, go to the GeoFRED website, and create a second map by following these instructions:
1. Click on "Build New Map"
2. Click on "Tools"
3. Click on "Choose Data" and select "Region Type: Census Division"
4. Select "Data: Health Insurance Coverage: Coverage Rate"
5. Select "Date: 2009"
6. Select "Units: Percent Change from Year Ago"
7. Click on "Choose Colors" and select "Single Hue: reds"
8. Click on "Edit Legend" and select "Number of Color Classes: 2"
9. Enter "0" in the top value box and "100" in the bottom value box.
Examine the maps and hypothesize the reasons for the observed relationship between change in unemployed persons and change in health insurance coverage.
Rank the following factors in order from the most likely to influence the observed relationship between change in unemployed persons and change in health insurance coverage to the factors least likely to influence the observed relationship.
A. Health care insurance coverage likely is a normal service;
B. Some people prefer not to purchase health care insurance;
C. Demand for health care insurance coverage is elastic;
D. Only employed people can easily obtain healthcare insurance coverage.
Teaching Notes and Tips
Figure 1. 2009 Unemployed Persons by Census Division. http://geof.red/m/hr0
Figure 2. 2009 Health Insurance Coverage: Coverage Rate by Census Division. http://geof.red/m/hr1
What prefatory remarks should set up the application exercise?
Demand for health insurance depends on preferences, price, income, and price of related services. Rather than simply tell the students about the determinants of demand, this exercise allows students to compare changes in employment to changes in the consumption of health insurance. The goal of this exercise is to encourage students to think about the various reasons behind such negative correlation.
The instructor should direct student groups to work in two phases: first, have team reporters identify and discuss the most important determinant factor; second, have team reporters identify and discuss the least important determinant factor.
What kinds of follow-up questions are recommended for facilitating the debriefing conversation among team reporters?
On the first map, the darker red color indicates geographical areas where the number of unemployed people increased. On the second map, the lighter red color indicates geographical areas where the number of people with health care coverage decreased. Don't overlook Alaska!
There is no clear ranking among the reasons for the negative correlation. The logic of every team's argument for the ranking should be evaluated by the instructor.
What points should be emphasized in the instructor's summary remarks to conclude the exercise?
A. Access to health insurance is determined by both income and employment status;
B. The main source of income for most people are wages and salaries from employment;
C. In 2009, as unemployment increased, the demand for health insurance coverage decreased;
D. Although we cannot tell whether health care insurance coverage is a normal or a luxury service, its demand is likely correlated with income.
Assessment
1) A correlation between increasing unemployment and decreasing health care insurance coverage is observed;
2) For most people, employment and income are directly related; Income determines consumption;
2) Compelling arguments are presented in the ranking of reasons for the observed correlation.
The following essay question could be asked as a follow-up to the exercise:
The increase in unemployment in 2009 was correlated with a decrease in the proportion of people with health care coverage. What economic argument(s) can explain this relationship? Explain your argument(s) carefully.
References and Resources
https://www.healthcare.gov/unemployed/coverage/
https://www.nytimes.com/2003/11/16/us/for-middle-class-health-insurance-becomes-a-luxury.html