The Spillover Effect of National Health Insurance on Household Consumption Patterns: Evidence from a Natural Experiment in Taiwan

Jui-fen Rachel Lu

One of the major aims of implementing a national health insurance program in Taiwan in RSVP required by 5PM May 2

1995 was to provide financial risk protection to its 23 million citizens.   Households may differ in how they allocate the resources freed up and available to them as a result of health insurance reducing their exposure to risk.  This study aims to evaluate the impact of social insurance on household consumption patterns.  A difference-in-difference estimation model was applied to data from the 1993-2005 Taiwan Survey of Family Income and Expenditure to assess the insurance effect.  Among the non-medical spending items, we found a 1.89% increase in the share of spending for housing and water bills, suggesting that relatively more resources were devoted to improving housing conditions. Households with lower socio-economic status (in terms of income and education level) showed a more substantial drop in medical consumption, but households across different socio-economic strata did not significantly differ in non-medical expenditures.

Thursday, May 03, 2012 | 12:00 pm — 1:30 pm
Okimoto Conference Room, Encina Hall East, 3rd Floor

Asia Health Policy Program, Shorenstein APARC