Health Insurance and Households' Precautionary Behaviors - an Unusual Natural Experiment

34 Pages Posted: 14 Dec 2002 Last revised: 31 Oct 2010

See all articles by Shin-Yi Chou

Shin-Yi Chou

Lehigh University - Department of Economics; National Bureau of Economic Research (NBER)

Jin‐Tan Liu

National Taiwan University - Department of Economics; National Bureau of Economic Research (NBER)

James K. Hammitt

Harvard University

Date Written: December 2002

Abstract

By reducing risk of large out-of-pocket medical expenses, comprehensive social health insurance may reduce households' motivation to engage in precautionary behaviors such as saving, procurement of private insurance, and spousal labor-force participation. We use the natural experiment provided by the 1995 introduction of National Health Insurance in Taiwan to examine these effects, using pre-existing differences in access to health insurance (tied to the household head's and spouse's joint employment status) to identify the effects of increasing insurance coverage. We find that comprehensive health insurance has a statistically significant and large effect on household savings and purchase of private accident insurance, but no significant effect on spousal employment.

Suggested Citation

Chou, Shin-Yi and Liu, Jin-Tan and Hammitt, James K., Health Insurance and Households' Precautionary Behaviors - an Unusual Natural Experiment (December 2002). NBER Working Paper No. w9394. Available at SSRN: https://ssrn.com/abstract=362076

Shin-Yi Chou (Contact Author)

Lehigh University - Department of Economics ( email )

620 Taylor Street
Bethlehem, PA 18015
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Jin-Tan Liu

National Taiwan University - Department of Economics ( email )

21 Hsu-Chow Road
Taipei, 10020
Taiwan

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

James K. Hammitt

Harvard University ( email )

718 Huntington Avenue
Boston, MA 02115
United States
617-432-4343 (Phone)
617-432-0190 (Fax)

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