Persistent Effects of Temporary Incentives: Evidence from a Nationwide Health Insurance Experiment

Tinbergen Institute Discussion Paper 2019-078/V

48 Pages Posted: 2 Dec 2019

See all articles by Aurelien Baillon

Aurelien Baillon

affiliation not provided to SSRN

Joseph J. Capuno

University of the Philippines (Quezon City) - School of Economics

Owen O'Donnell

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Jr. Carlos R. Tan

University of the Philippines (Quezon City) - School of Economics

Kim van Wilgenburg

Erasmus University Rotterdam (EUR)

Date Written: November 12, 2019

Abstract

Temporary incentives are offered in anticipation of persistent effects, but these are seldom estimated. We use a nationwide randomized experiment in the Philippines to estimate effects three years after the withdrawal of two incentives for health insurance. A premium subsidy had a persistent effect on enrollment that is more than four fifths of the immediate effect. Application assistance had a much larger immediate impact, but less than a fifth of this effect persisted. The subsidy persuaded those with higher initial willingness to pay to enroll and keep enrolling, while application assistance achieved a larger immediate effect by drawing in those who valued insurance less and were less likely to re-enroll.

Keywords: incentives, persistence, health insurance, subsidy, randomized experiment

JEL Classification: I13, C93

Suggested Citation

Baillon, Aurelien and Capuno, Joseph J. and O'Donnell, Owen and Tan, Jr. Carlos R. and van Wilgenburg, Kim, Persistent Effects of Temporary Incentives: Evidence from a Nationwide Health Insurance Experiment (November 12, 2019). Tinbergen Institute Discussion Paper 2019-078/V, Available at SSRN: https://ssrn.com/abstract=3488632 or http://dx.doi.org/10.2139/ssrn.3488632

Aurelien Baillon (Contact Author)

affiliation not provided to SSRN

Joseph J. Capuno

University of the Philippines (Quezon City) - School of Economics

Philippines

Owen O'Donnell

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Jr. Carlos R. Tan

University of the Philippines (Quezon City) - School of Economics

Philippines

Kim Van Wilgenburg

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

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