Bismarck's Health Insurance and the Mortality Decline

72 Pages Posted: 11 Aug 2017

See all articles by Stefan Bauernschuster

Stefan Bauernschuster

University of Passau - Business Administration and Economics; CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute; IZA Institute of Labor Economics

Anastasia Driva

Ludwig Maximilian University of Munich (LMU)

Erik Hornung

University of Cologne - Center for Macroeconomic Research (CMR); CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

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Date Written: August 2017

Abstract

We investigate the impact on mortality of the world's first compulsory health insurance, established by Otto von Bismarck, Chancellor of the German Empire, in 1884. Employing a multi-layered empirical setup, we draw on international comparisons and difference-in-differences strategies using Prussian administrative panel data to exploit differences in eligibility for insurance across occupations. All approaches yield a consistent pattern suggesting that Bismarck's Health Insurance generated a significant mortality reduction. The results are largely driven by a decline of deaths from infectious diseases. We present prima facie evidence that diffusion of new hygiene knowledge through physicians was an important channel.

Keywords: demographic transition, Health Insurance, Mortality, Prussian Economic History

JEL Classification: I13, I18, J11, N33

Suggested Citation

Bauernschuster, Stefan and Driva, Anastasia and Hornung, Erik, Bismarck's Health Insurance and the Mortality Decline (August 2017). CEPR Discussion Paper No. DP12200, Available at SSRN: https://ssrn.com/abstract=3016787

Stefan Bauernschuster (Contact Author)

University of Passau - Business Administration and Economics ( email )

University of Passau
Innstrasse 27
D-94030 Passau
Germany

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 81679
Germany

IZA Institute of Labor Economics ( email )

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

Anastasia Driva

Ludwig Maximilian University of Munich (LMU) ( email )

Geschwister-Scholl-Platz 1
Munich, DE Bavaria 80539
Germany

Erik Hornung

University of Cologne - Center for Macroeconomic Research (CMR) ( email )

Cologne
Germany

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Munich
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

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