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Health spending slowed down in spite of the crisis

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Abstract

We exploit plausibly exogenous regulatory changes in the mortgage lending market to estimate causal effects of the financial boom and bust on personal income in the health sector. We find that counties that were exogenously more exposed to the crisis because of the regulatory reforms experienced a greater rise in the size of the health sector over the course of the boom and the bust relative to control counties, with the differential persisting through the recovery. We provide suggestive evidence that increased mortality during the bust and greater capital investment during the boom contributed to this persistence of health spending.

Suggested Citation

  • Marco DiMaggio & Andrew F. Haughwout & Amir Kermani & Matthew Mazewski & Maxim L. Pinkovskiy, 2016. "Health spending slowed down in spite of the crisis," Staff Reports 781, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednsr:781
    Note: Revised October 2019.
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

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