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

40 Pages Posted: 22 Nov 2014

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

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Abstract

Using data from the US Health and Retirement Study, we study the causal effect of increased health insurance coverage through Medicare and the associated reduction in health-related background risk on financial risk-taking. Given the onset of Medicare at age 65, we identify our effect of interest using a regression discontinuity approach. We find that getting Medicare coverage induces stockholding for those with at least some college education, but not for their less-educated counterparts. Hence, our results indicate that a reduction in background risk induces financial risk-taking in individuals for whom informational and pecuniary stock market participation costs are relatively low.

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. IZA Discussion Paper No. 8635. Available at SSRN: https://ssrn.com/abstract=2529344

Dimitrios Christelis (Contact Author)

Adam Smith Business School, University of Glasgow ( email )

Room 207F, Gilbert Scott Building
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+44 141330 2000 (ext. 0624) (Phone)

HOME PAGE: http://www.gla.ac.uk/schools/business/staff/dimitrioschristelis/

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

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Italy

Center for Financial Studies (CFS) ( email )

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Germany

Netspar ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Dimitris Georgarakos

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

Sonnemannstrasse 20
Frankfurt am Main, 60314
Germany

Center for Financial Studies (CFS) ( email )

Grüneburgplatz 1
Frankfurt am Main, 60323
Germany

Anna Sanz De Galdeano

Universitat Autònoma de Barcelona ( email )

Edifici B - Campus Bellaterra
Barcelona, 08193
Spain

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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