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How Do Economic Shocks Affect Family Health Care Spending Burdens?


  • Irina B. Grafova
  • Alan C. Monheit
  • Rizie Kumar


We use data from the Medical Expenditure Panel Survey (MEPS) for the years 2004 - 2012 to examine the impact of economic shocks on the family’s out-of-pocket health care spending burden. We define this burden as the share of family income devoted to out-of-pocket health care spending. In contrast to static, cross-sectional analyses, our study examines how the within-family change in spending burden over the two-year MEPS observation period responds to losses in family income, insurance, and employment. We also consider the impact of such losses on single-mother and two-parent families. To do so, we apply fractional response and health expenditure models using the correlated random effects (CRE) method to control for time-invariant, unobserved heterogeneity across family units. We find evidence that the change in the out-of-pocket spending burden is sensitive to income shocks, and that income changes rather than changes in health spending per se appears to drive changes in the out-of-pocket burden.

Suggested Citation

  • Irina B. Grafova & Alan C. Monheit & Rizie Kumar, 2019. "How Do Economic Shocks Affect Family Health Care Spending Burdens?," NBER Working Papers 26443, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:26443
    Note: HE

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    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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