The Response of Births to Changes in Health Care Costs
Data from a randomized controlled trial, The RAND Health Insurance Experiment, provide the opportunity to examine whether an exogenous short-term change in the cost of medical care affects fertility in a cross-section of women. Women randomly assigned to receive free medical care for three to five years had 29 percent more births than women who were assigned to insurance plans requiring cost-sharing for health services. This response to changes in health insurance suggests that loss of insurance coverage during recessions may attenuate the effect of lower time prices in increasing birth rates in economic downturns.
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