The impact of health insurance on stockholding: a regression discontinuity approach

Christelis, D. , Georgarakos, D. and Sanz-de-Galdeano, A. (2020) The impact of health insurance on stockholding: a regression discontinuity approach. Journal of Health Economics, 69, 102246. (doi: 10.1016/j.jhealeco.2019.102246)

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.

• Item Type: Articles
• Additional Information: Christelis acknowledges financial support from the European Union and the Greek Ministry of Education under program Thales, Grant MIC 380266. Sanz-de-Galdeano is also affiliated with CRES-UPF. She acknowledges financial support from the Spanish Ministry of Economy and Competitiveness Grant ECO2017-87069-P.
• Status: Published
• Refereed: Yes
• Glasgow Author(s) Enlighten ID: Georgarakos, Professor Dimitris and Christelis, Professor Dimitris
• Authors: Christelis, D., Georgarakos, D., and Sanz-de-Galdeano, A.
• College/School: College of Social Sciences > Adam Smith Business School > Economics
• Journal Name: Journal of Health Economics
• Publisher: Elsevier
• ISSN: 0167-6296
• ISSN (Online): 1879-1646
• Published Online: 16 November 2019
• Copyright Holders: Copyright © 2019 Elsevier B.V.
• First Published: First published in Journal of Health Economics 69: 102246
• Publisher Policy: Reproduced in accordance with the publisher copyright policy