Abstract
ABSTRACT By reducing risk of large out-of-pocket medical expenses, comprehensive social healthinsurance may reduce households’ motivation to engage in precautionary behaviors such assaving, procurement of private insurance, and spousal labor-force participation. We use thenatural experiment provided by the 1995 introduction of National Health Insurance in Taiwan toexamine these effects, using pre-existing differences in access to health insurance (tied to thehousehold head’s and spouse’s joint employment status) to identify the effects of increasinginsurance coverage. We find that comprehensive health insurance has a statistically significantand large effect on household savings and purchase of private accident insurance, but nosignificant effect on spousal employment.Shin-Yi Chou Jin-Tan LiuDepartment of Humanities Department of Economicsand Social Sciences National Taiwan University New Jersey Institute of Technology 21 Hsu-Chow RoadNewark, NJ 07102 Taipei (100), Taiwanand NBER and NBERchou@admin.njit.edu liujt@ccms.ntu.edu.twJames K. HammittDepartment of Health Policyand ManagementHarvard School of Public Health 718 Huntington AvenueBoston, MA 02155-5294jkh@hsph.harvard.edu
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