The Impact of Health Insurance on Stockholding: A Regression Discontinuity Approach

48 Pages Posted: 9 Nov 2014 Last revised: 7 Oct 2019

See all articles by Dimitris Christelis

Dimitris Christelis

Adam Smith Business School, University of Glasgow; Centre for Studies in Economics and Finance (CSEF), University of Naples Federico II; Center for Financial Studies (CFS); Netspar

Dimitris Georgarakos

European Central Bank (ECB) - Directorate General Research; Center for Financial Studies (CFS)

Anna Sanz-de-Galdeano

Universitat Autònoma de Barcelona; IZA Institute of Labor Economics

Multiple version iconThere are 3 versions of this paper

Date Written: January 29, 2017

Abstract

Economic theory predicts that a reduction in background risk should induce financial risk-taking, particularly for individuals with low stock market participation costs. Hence, health insurance coverage could affect financial risk-taking by offsetting health-related background risk. We use a regression discontinuity design to examine whether Medicare eligibility at age 65 increases stockholding in the US, and find that it does so for those with college education, but not for their less-educated counterparts who face higher stock market participation costs. Our results are unlikely due to the reduction of medical expenses associated with Medicare coverage because the latter does not affect bondholding.

Keywords: Health Insurance, Medicare, Stockholding, Regression Discontinuity, Household Finance

JEL Classification: D14, I13, G11

Suggested Citation

Christelis, Dimitrios and Georgarakos, Dimitris and Sanz De Galdeano, Anna, The Impact of Health Insurance on Stockholding: A Regression Discontinuity Approach (January 29, 2017). Available at SSRN: https://ssrn.com/abstract=2520647 or http://dx.doi.org/10.2139/ssrn.2520647

Dimitrios Christelis

Adam Smith Business School, University of Glasgow ( email )

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Centre for Studies in Economics and Finance (CSEF), University of Naples Federico II ( email )

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Center for Financial Studies (CFS) ( email )

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Dimitris Georgarakos (Contact Author)

European Central Bank (ECB) - Directorate General Research ( email )

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Germany

Center for Financial Studies (CFS) ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
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Anna Sanz De Galdeano

Universitat Autònoma de Barcelona ( email )

Edifici B - Campus Bellaterra
Barcelona, 08193
Spain

IZA Institute of Labor Economics

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Bonn, D-53072
Germany

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