Who Opts Out of the Statutory Health Insurance?

34 Pages Posted: 1 Apr 2015

See all articles by Harald Tauchmann

Harald Tauchmann

Rhine-Westphalia Institute for Economic Research (RWI-Essen)

Christian Bünnings

University of Paderborn; RWI - Leibniz Institute for Economic Research

Date Written: December 2, 2013

Abstract

The coexistence of social health insurance and private health insurance in Germany is subject to intense public debate. As only few have the opportunity to choose between the two systems, they are often regarded as privileged by the health insurance system. Applying a hazard model in discrete time, this paper examines the role of incentives set by the regulatory framework as well as the influence of individual personality characteristics on the decision to opt out of the statutory system. To address potential endogeneity of one of the key explanatory variables an instrumental variable approach is also applied. The estimation results yield robust evidence on the choice of health insurance type that is consistent with rational decision making, with both incentives set by regulation and personality traits as relevant determinants.

Keywords: Statutory and private health insurance; incentives; personality traits

JEL Classification: C13, C23, I13

Suggested Citation

Tauchmann, Harald and Bünnings, Christian, Who Opts Out of the Statutory Health Insurance? (December 2, 2013). Ruhr Economic Paper No. 458, Available at SSRN: https://ssrn.com/abstract=2383844 or http://dx.doi.org/10.2139/ssrn.2383844

Harald Tauchmann

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

Hohenzollernstr. 1-3
45128 Essen
Germany

Christian Bünnings (Contact Author)

University of Paderborn ( email )

Warburger Str. 100
Paderborn, D-33098
Germany

RWI - Leibniz Institute for Economic Research ( email )

Hohenzollernstraße 1-3
Essen
Germany

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