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Households’ precautionary behaviors—the effects of the introduction of National Health Insurance in Taiwan

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  • Shin-Yi Chou
  • Jin-Tan Liu
  • James Hammitt

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, but no significant effects on purchase of private accident insurance and spousal employment. Copyright Springer Science+Business Media, LLC 2006

Suggested Citation

  • Shin-Yi Chou & Jin-Tan Liu & James Hammitt, 2006. "Households’ precautionary behaviors—the effects of the introduction of National Health Insurance in Taiwan," Review of Economics of the Household, Springer, vol. 4(4), pages 395-421, December.
    • Handle: RePEc:kap:reveho:v:4:y:2006:i:4:p:395-421
    DOI: 10.1007/s11150-006-0014-3
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    Cited by:

    1. Eswar S. Prasad, 2011. "Rebalancing Growth in Asia," International Finance, Wiley Blackwell, vol. 14(1), pages 27-66, April.
    2. Morgan, Peter J., 2012. "The role of macroeconomic policy in rebalancing growth," Journal of Asian Economics, Elsevier, vol. 23(1), pages 13-25.
    3. Shao-Hsun Keng & Shin-Yi Wu, 2014. "Living Happily Ever After? The Effect of Taiwan’s National Health Insurance on the Happiness of the Elderly," Journal of Happiness Studies, Springer, vol. 15(4), pages 783-808, August.
    4. Lugilde, Alba & Bande, Roberto & Riveiro, Dolores, 2017. "Precautionary Saving: a review of the theory and the evidence," MPRA Paper 77511, University Library of Munich, Germany.
    5. Lili Zheng & Yuan Lu, 2020. "Health Human Capital Investment and Economic Growth," Technium Social Sciences Journal, Technium Science, vol. 8(1), pages 229-248, June.
    6. Jorge Tovar & Miguel Urrutia, 2017. "The Impact of Social Safety Net Programs on Household Savings in Colombia," The Developing Economies, Institute of Developing Economies, vol. 55(1), pages 23-37, March.

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    More about this item

    Keywords

    Precautionary savings; Labor force participation; Insurance; D1; H4; I1;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • H4 - Public Economics - - Publicly Provided Goods
    • I1 - Health, Education, and Welfare - - Health

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