Race, Ethnicity and the Dynamics of Health Insurance Coverage

52 Pages Posted: 6 Oct 2008

See all articles by Robert W. Fairlie

Robert W. Fairlie

University of California, Santa Cruz - Department of Economics; National Bureau of Economic Research

Rebecca A. London

Stanford University

Abstract

Using matched data from the 1996 to 2004 Current Population Survey (CPS), we examine racial patterns in annual transitions into and out of health insurance coverage. We first decompose racial differences in static health insurance coverage rates into group differences in transition rates into and out of health insurance coverage. The low rate of health insurance coverage among African-Americans is due almost entirely to higher annual rates of losing health insurance than whites. Among the uninsured, African-Americans have similar rates of gaining health insurance in the following year as whites. Estimates from the matched CPS also indicate that the lower rate of health insurance coverage among Asians is almost entirely accounted for by a relatively high rate of losing health insurance. In contrast to these findings, differences in health insurance coverage between Latinos and whites are due to group differences in both the rate of health insurance loss and gain. Using logit regression estimates, we also calculate non-linear decompositions for the racial gaps in health insurance loss and gain. We find that two main factors are responsible for differences in health insurance loss between working-age whites and minorities: job loss and education level. Higher rates of job loss account for 30 percent of the health insurance gap for African-Americans and Asians, and 16 percent of the health insurance gap for Latinos. Lower levels of education explain roughly 15 percent of the gap for African-Americans and Latinos (Asians' higher levels of education serve to close the gap). Higher rates of welfare and SSI participation among African-Americans also serve to widen the gap in health insurance loss by 8 percent.

Keywords: race, health insurance, insurance dynamics

JEL Classification: I1, J15

Suggested Citation

Fairlie, Robert W. and London, Rebecca A., Race, Ethnicity and the Dynamics of Health Insurance Coverage. IZA Discussion Paper No. 3708, Available at SSRN: https://ssrn.com/abstract=1278908 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

Robert W. Fairlie (Contact Author)

University of California, Santa Cruz - Department of Economics ( email )

Department of Economics
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Santa Cruz, CA 95064
United States
831-459-3332 (Phone)

HOME PAGE: http://people.ucsc.edu/~rfairlie/

National Bureau of Economic Research ( email )

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Cambridge, MA 02138
United States

HOME PAGE: http://www.nber.org/people/robert_fairlie?page=1&perPage=50

Rebecca A. London

Stanford University ( email )

Stanford, CA 94305
United States

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