nep-hea New Economics Papers
on Health Economics
Issue of 2019‒01‒28
thirteen papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. Historical Analysis of National Subjective Wellbeing using millions of Digitized Books By Hills, Thomas; Proto, Eugenio; Sgroi, Daniel
  2. Multigenerational Effects of Early Life Health Shocks By C. Justin Cook; Jason M. Fletcher; Angela Forgues
  3. The Effect of Superstition on Health: Evidence from the Taiwanese Ghost Month By Martin Halla; Chia-Lun Liu; Jin-Tan Liu
  4. Health spending in Italy: the impact of immigrants By Giulia Bettin; Agnese Sacchi
  5. It’s a long walk: Lasting effects of maternity ward openings on labour market performance By Lazuka, Volha
  6. An Apple a Day? Adult Food Stamp Eligibility and Health Care Utilization among Immigrants By Chloe N. East; Andrew I. Friedson
  7. Do Health Shocks Modify Personality Traits? Evidence from Locus Of Control By Antoine Marsaudon
  8. Ain’t got no, I got life: Childhood exposure to WW2 and financial risk taking in adult life. By Bellucci, Davide; Fuochi, Giulia; Conzo, Pierluigi
  9. Ownership and Hospital Productivity By Brigitte Dormont; Carine Milcent
  10. Extra costs of integrity: Pharmacy markups and generic substitution in Finland By Izhak, Olena
  11. Free health care for the poor: a good way to achieve universal health coverage? Evidence from Morocco By Raphaël Cottin
  12. Parental Migration Decisions and Child Health Outcomes: Evidence from China By Lin, Carl; van der Meulen Rodgers, Yana
  13. The Returns to Parental Health: Evidence from Indonesia By Luca, Dara Lee; Bloom, David E.

  1. By: Hills, Thomas (Department of Psychology, University of Warwick); Proto, Eugenio (Department of Economics, University of Warwick, CAGE and IZA); Sgroi, Daniel (Department of Economics, University of Warwick, CAGE and Nuffield College, University of Oxford)
    Abstract: We develop a new way to measure national subjective well-being across the very long run where traditional survey data on well-being is not available. Our method is based on quantitative analysis of digitized text from millions of books published over the past 200 years, long before the widespread availability of consistent survey data. The method uses psychological valence norms for thousands of words in different languages to compute the relative proportion of positive and negative language for four different nations (the USA, UK, Germany and Italy). We validate our measure against existing survey data from the 1970s onwards (when such data became available) showing that our measure is highly correlated with surveyed life satisfaction. We also validate our measure against historical trends in longevity and GDP (showing a positive relationship) and conflict (showing a negative relationship). Our measure allows a first look at changes in subjective well-being over the past two centuries, for instance highlighting the dramatic fall in well-being during the two World Wars and rise in relation to longevity.
    Keywords: historical subjective well-being ; language ; big data ; GDP ; conflict
    JEL: N3 N4 O1 D6
    Date: 2019
  2. By: C. Justin Cook; Jason M. Fletcher; Angela Forgues
    Abstract: A large literature has documented links between harmful early life exposures and later life health and socioeconomic deficits. These studies, however, are typically unable to examine the possibility that these shocks are transmitted to the next generation. Our study traces the impacts of in utero exposure to the 1918 influenza pandemic on the outcomes of the children and grandchildren of those affected using representative survey data from the US. We find evidence of multigenerational effects on educational, economic, and health outcomes.
    JEL: I1 I14 J24
    Date: 2018–12
  3. By: Martin Halla; Chia-Lun Liu; Jin-Tan Liu
    Abstract: Superstition is a widespread phenomenon. We empirically examine its impact on health-related behavior and health outcomes. We study the case of the Taiwanese Ghost Month. During this period, which is believed to increase the likelihood of bad outcomes, we observe substantial adaptions in health-related behavior. Our identification exploits idiosyncratic variation in the timing of the Ghost Month across Gregorian calendar years. Using high-quality administrative data, we document for the period of the Ghost Months reductions in mortality, hospital admissions, and births. While the effect on mortality is a quantum effect, the latter two effects reflect changes in the timing of events. These findings suggest potential benefits of including emotional and cultural factors in public health policy.
    JEL: D83 D91 I12 Z12
    Date: 2019–01
  4. By: Giulia Bettin (Department of Economics and Social Sciences, Universita' Politecnica delle Marche); Agnese Sacchi (Department of Economics and Law, Sapienza University)
    Abstract: The welfare impact of immigration is a hot topic especially for countries at the external borders of the European Union. This paper studies how immigrants affect public health expenditure across Italian regions during the period 2003-2015. Identification strategy is based on shift{share instruments, which are also robust to pull factors that might attract immigrants in Italy and to internal migration of natives. We find that a 1 percentage point increase in immigrants over total population leads to a decrease in public health expenditure per capita by about 3.9% (i.e. around 70 euro per capita). This evidence is confirmed when focusing on needy immigrants from low income countries with less developed welfare systems. Among possible channels, we find no support for any crowding out effects from public to private health services by natives due to increasing immigration neither for the effect of entry barriers limiting the immigrants' reliance on public healthcare. Our results are driven by immigrants' demographic structure: foreigners are mostly males and younger workers that call for less health spending, according to a positive selection mechanism.
    Keywords: immigration, public health expenditure, demographic structure, positive selection
    JEL: F22 H51 H41 I10 J61
    Date: 2019–01
  5. By: Lazuka, Volha (Department of Economic History, Lund University)
    Abstract: Studies showing that large-scale public health interventions in early life have lasting economic consequences are still scarce and rarely disclose the mechanisms. Being born in a hospital versus having a traditional birth attendant at home represents the most common early life policy change worldwide. Knowing the consequences of this policy is also important given the ongoing enlargement of maternity hospitals. In 1931–1946, the Swedish state subsidized the opening of new maternity wards, which led to the gradual decline of home deliveries assisted by midwives. Maternity wards offered improved conditions for mothers and newborns, including hygiene, surgical proficiency and medications, and health monitoring. By applying a difference-in-differences approach and geocoding techniques to register-based individuallevel data on the total population, observed from birth until the age of 65, this paper explores the long-term economic effects of access to better health services at birth using the opening of maternity wards throughout the country as an early life quasi-experiment. The paper first finds that the reform substantially reduced neonatal mortality in the short term by 19.0–26.5 deaths per 1000. Capturing survivors of the affected cohorts at the ages of 47–64, it then shows sizable long-term effects of the introduction of maternity wards on labour income (2.4–4.7 per cent) and disability pensions (4.4–11.9 per cent). The effects run directly through better health and indirectly through higher levels of schooling. Small-scale local maternity wards yield a larger social rate of return than large-scale hospitals, stemming from the treatment of normal births.
    Keywords: early life; maternity ward; labour income; efficency; Sweden
    JEL: I18 I38 J24 N34
    Date: 2019–01–14
  6. By: Chloe N. East (University of Colorado, Denver); Andrew I. Friedson (University of Colorado, Denver)
    Abstract: In this study, we document the effect of food stamp access on adult health care utilization. While the Food Stamp Program provides one of the largest safety nets in the United States today, the universal nature of the program across geographic areas and over time limits the potential for quasi-experimental analysis. To circumvent this, we use variation in documented immigrants’ eligibility for food stamps across states and over time due to welfare reform in 1996. Our estimates indicate that access to food stamps reduced physician visits. Additionally, we find that for single women, food stamps increased the affordability of specialty health care. These findings have important implications for cost-benefit analyses of the Food Stamp Program, as reductions in health care utilization because of food stamps may offset some of the program’s impact on the overall government budget owing to the existence of government-provided health insurance programs such as Medicaid.
    Keywords: Food stamps, immigrants, health cares
    JEL: H51 H53 H75 I11 I18 Q18
    Date: 2018–12
  7. By: Antoine Marsaudon (PSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper analyzes whether a personality trait, that is, locus of control, is stable after the occurrence of a health shock, namely a hospital stay. To do so, we use the German Socio-Economics Panel dataset. To identify the causal effect of such a shock on locus of control, we rely on a fixed-effects model. Results suggest that individuals facing health shocks are more likely to decrease their locus of control. That is, they tend to believe that their future outcomes are more determined by external factors than their own will. This decrease is attributable to individuals that had, prior to the shock, lower values of locus of control. Further, individuals facing severe hospital stays (i.e., measured by the number overnights) and those with chronic diseases (i.e., measured by the number of hospital stays within a year), have a higher LOC decline than others. This provides evidence that perception of control is not constant over time and could change after experiencing a traumatic health event.
    Keywords: Health shocks,Locus of control,Hospital stays,Panel data,Fixed-effect model
    Date: 2019–02
  8. By: Bellucci, Davide; Fuochi, Giulia; Conzo, Pierluigi (University of Turin)
    Abstract: Childhood adverse experiences might have long-lasting effects on decisions under uncertainty in adult life. Merging the European Survey on Health, Ageing and Retirement with data on conflict events happened during Second World War, and relying on region-by-cohort variation in war exposure, we show that warfare exposure during childhood is associated with lower financial risk taking in later life. Individuals who experienced war episodes as children hold less – and are less likely to hold – stocks, but are more likely to hold life insurance, compared to non-exposed individuals. Effects are robust to the inclusion of potential mediating factors, and are tested for nonlinearity and heterogeneity. In addition, war-exposed respondents show higher resilience to financial shocks, as they react less dramatically to stock market losses. By shaping cognitive schemata, the experience of war might have increased the perception of uncertainty and uncontrollability of the environment, leading to an overestimation of risks and of the likelihood of negative events.
    Date: 2019–01
  9. By: Brigitte Dormont (UP9 - Université Paris 9, Dauphine - Université Paris-Dauphine); Carine Milcent (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)
    Abstract: There is ongoing debate about the effect of ownership on hospital performance as regards efficiency and care quality. This paper proposes an analysis of the differences in productivity and efficiency between French public and private hospitals. In France, public and private hospitals do not only differ in their objectives. They are also subject to different rules as regards investments and human resources management. In addition, they were financed according to different payment schemes until 2004: a global budget system was used for public hospitals, while private hospitals were paid on a fee-for-service basis. Since 2004, a prospective payment system (PPS) with fixed payment per stay in a given DRG is gradually introduced for both private and public hospitals. Payments generally differ for the same DRG, depending on whether the stay occurred in a private or public hospital. A convergence of payments between the nonprofit and for profit sectors was planned by 2018 by the previous government, but this project has been abandoned by the newly elected government. Pursuing such a convergence comes down to suppose that there are differences in efficiency between private and public hospitals, which would be reduced by the introduction of competition between these two sectors. The purpose of this paper is to compare the productivity of public and private hospitals in France. We try to assess the respective impacts, on productivity differences, of differences in efficiency, patient characteristics and production composition. We have chosen to estimate a production function. For that purpose, we have defined a variable measuring the volume of care services provided by each hospital, synthetizing the hospital multiproduct activity into one homogenous output. Our data comes from two administrative sources which record exhaustive information about French hospitals. Matching these two database provides us an original source of information, at the hospital-year level, about both the production composition (number of stays in each DRG), and production factors (number of beds, facilities, number of doctors, nurses, of administrative and support staff, etc.). We observe 1,604 hospitals over the period 1998-2003, of which 642 hospitals are public, 126 are private not-for-profit and 836 are private-for-profit. This database is relative to acute care and covers more than 95 % of French hospitals. We use a stochastic production frontier approach combined with hospitals fixed effects. We find that the lower productivity of public hospitals is not explained by inefficiency (distance to the frontier), but oversized establishments, patient characteristics and production characteristics (small proportion of surgical stays). Once patient and production characteristics are taken into account, large and medium sized public hospitals appear to be more efficient than private hospitals. As a result, payment convergence would provide incentives for public hospitals to change the composition of their supply for care.
    Date: 2018
  10. By: Izhak, Olena
    Abstract: I evaluate how the probability of substitution of a prescribed drug in a pharmacy depends on the pharmacists' profits and patients' out of pocket costs. I use Finnish population-wide data covering all prescriptions of three popular antidepressants. I find that one euro increase in the total markup difference between the prescribed drug and its cheapest available substitute is associated with 1.7 percentage points decrease in the probability of substitution. This result is driven by brand-name drugs. An increase in the patients' out of pocket cost differential yields a 0.6 percentage points increase in the probability of accepting the substitution. My findings offer novel evidence that pharmacists' incentives are instrumental for prescription drug cost savings and overall cost effectiveness of the health care system.
    Keywords: Generic substitution,Pharmacies,Prescription drugs
    JEL: D78 I11 I18 L11 L65
    Date: 2019
  11. By: Raphaël Cottin (1PSL, Université Paris Dauphine, LEDa, DIAL)
    Abstract: Policies and programs aimed at giving access to health care free of charge for some segments of the population are increasingly being put in place by low- and middle income countries, going against the Washington-consensus era recommendation to impose user fees on public health care to insure a better quality of service. Yet, such policies may not be suited for middle-income countries, where user fees are not necessarily be the biggest barriers to health care. We study a nationwide example of such a policy with the generalization of the Medical Assistance Regime or RAMED in the Kingdom of Morocco, a policy aiming at giving free access to hospital care to the poorest quarter of the population. Using nationally representative panel data collected before, during and after the extension of the policy, we show that the removal of user fees did have a positive impact on access to health care, but that this impact comes mostly from poorer, rural households. We also study the impact on health expenditures, and find that it has not led to a decrease of the financial burden, except for the subset of urban households that have recurring health expenditures. Overall, our result show that in a middle income country , user fees, even modest, seem to significantly deter healthcare usage for the rural part of the population.
    Keywords: Demand for health care, targeted policies, Morocco
    JEL: I11 G22 H43
    Date: 2018–11
  12. By: Lin, Carl (Bucknell University); van der Meulen Rodgers, Yana (Rutgers University)
    Abstract: This study uses migrant household survey data from 2008 and 2009 to examine how parental migration decisions are associated with the nutritional status of children in rural and urban China. Results from instrumental variables regressions show a substantial adverse effect of children's exposure to parental migration on height-for-age Z-scores of left-behind children relative to children who migrate with their parents. Additional results from a standard Blinder-Oaxaca decomposition, a quantile decomposition, and a counterfactual distribution analysis all confirm that children who are left behind in rural villages – usually because of the oppressive hukou system – have poorer nutritional status than children who migrate with their parents, and the gaps are biggest at lower portions of the distribution.
    Keywords: migration, China, children, health, nutrition
    JEL: I10 J61
    Date: 2018–11
  13. By: Luca, Dara Lee (Mathematica Policy Research); Bloom, David E. (Harvard University)
    Abstract: This paper investigates the economic returns to parental health. To account for potential endogeneity between parental health and child outcomes, we leverage longitudinal microdata from Indonesia to estimate individual fixed effects models. Our results show that the economic returns to parental health are high. We show that maternal health not only significantly affects her children's health, but is also intrinsically linked to her spouse's labor market status and earnings. Paternal health appears to be more linked to child schooling outcomes, especially for girls. When both parents are in poor health, the negative effects on their children are compounded. Additionally, the consequences of poor parental health are enduring. Longer-run effects of poor parental health manifest in a lower likelihood of high school completion, fewer years of schooling, and poorer adult health.
    Keywords: parental health, spousal health, child health, education, family economics
    JEL: I12 J13 J16
    Date: 2018–11

This nep-hea issue is ©2019 by Nicolas R. Ziebarth. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.