nep-hea New Economics Papers
on Health Economics
Issue of 2022‒09‒26
nineteen papers chosen by
Nicolas R. Ziebarth
Cornell University

  1. The Private Provision of Public Services: Evidence from Random Assignment in Medicaid By Danil Agafiev Macambira; Michael Geruso; Anthony Lollo; Chima D. Ndumele; Jacob Wallace
  2. When Death was Postponed: The Effect of HIV Medication on Work and Marriage By Mette Ejrnæs; Esteban García-Miralles; Mette Gørtz; Petter Lundborg
  3. Do early episodes of depression and anxiety make homelessness more likely? By Julie Moschion; Jan C. van Ours
  4. Policies for young adults with reduced work capacity. Labour market impact in Sweden and Norway. By Hall, Caroline; Hardoy, Inés; von Simson, Kristine
  5. Age-Based Health Insurance Coverage Policies and Mental Health By Yiran Han; Baris K. Yörük
  6. Early Life Circumstances and the Health of Older Adults: A Research Note By Chen, Xi
  7. Capacity Strain and Racial Disparities in Hospital Mortality By Manasvini Singh; Atheendar Venkataramani
  8. The Governance of Non-Profits and their Social Impact: Evidence from a Randomized Program in Healthcare in the Democratic Republic of Congo By Anicet Fangwa; Caroline Flammer; Marieke Huysentruyt; Bertrand Quelin
  9. Famous after Death: The Effect of a Writer's Death on Book Sales By Ponzo, Michela; Scoppa, Vincenzo
  10. Childhood Vaccinations and Demographic Transition: Long-Term Evidence from India By Nandi, Arindam; Summan, Amit; Ngô, D. Thoai; Bloom, David E.
  11. Long-term Services and Supports and Disease Management among Older Chinese Adults in Different Stages of Cognitive Impairment By Lin, Zhuoer; Chen, Xi
  12. Is the Age Structure of the Population One of the Determinants of the Household Saving Rate in China? A Spatial Panel Analysis of Provincial Data By Charles Yuji Horioka; Luigi Ventura
  13. The economics of medication safety: Improving medication safety through collective, real-time learning By Katherine de Bienassis; Laura Esmail; Ruth Lopert; Niek Klazinga
  14. Impact of the right to education on school enrolment of children with disabilities: Evidence from India By Vinitha Varghese
  15. Doctor Who? The Effect of Physician-Patient Match on The SES-Health Gradient By Ida Lykke Kristiansen; Sophie Yanying Sheng
  16. Vaccination under pessimistic expectations in clinical trials and immunization campaigns By Johanna Etner; Josselin Thuilliez; Hippolyte d'Albis
  17. Influenza Mortality in French Regions after the Hong Kong Flu Pandemic By Florian Bonnet; Hippolyte d'Albis; Josselin Thuilliez
  18. Valuing Life over the Life Cycle By Pascal St-Amour
  19. Too Healthy to Fall Sick? Longevity Expectations and Protective Health Behaviours during the First Wave of COVID-19 By Celidoni, Martina; Costa-Font, Joan; Salmasi, Luca

  1. By: Danil Agafiev Macambira; Michael Geruso; Anthony Lollo; Chima D. Ndumele; Jacob Wallace
    Abstract: Nearly all prior work on government outsourcing has focused on the contracting firm's incentives. This paper shows how strong incentive contracts may be insufficient to generate spending reductions (or other desired outcomes) in the presence of a binding technological or managerial constraint. We study this outsourcing problem in the context of Medicaid. In healthcare, plans may have special capacity to interdict care provision at the pharmacy, where real-time adjudication enables insurers to deny services before they are rendered. Exploiting a large natural experiment in which Medicaid beneficiaries were randomly assigned between a state-administered FFS system and private managed care, we document how Medicaid outsourcing impacted spending, utilization, and consumer satisfaction. We find that spending was 5%-10% lower for enrollees assigned to managed care. These effects were concentrated in prescription drugs, where spending declined by about one quarter. Using administrative records that include information on real-time denials, we show that utilization management by plans caused efficiently-targeted reductions and substitutions at the pharmacy. Our results indicate that private managed care plans may have sharp tools for managing pharmacy benefits but blunter tools for managing medical benefits, where real-time claims adjudication is less feasible.
    JEL: H4 I11
    Date: 2022–08
  2. By: Mette Ejrnæs (University of Copenhagen and CEBI); Esteban García-Miralles (Bank of Spain); Mette Gørtz (University of Copenhagen and CEBI); Petter Lundborg (IZA and Department of Economics, Lund University)
    Abstract: Over the last century, global life expectancy has increased tremendously. A longer planning horizon may change individuals’ incentives to work, save, and marry but it has proven challenging to disentangle such incentive effects from those of improved health. In this paper, we study how individuals diagnosed with HIV reacted to the introduction of HIV medicine in 1995, which dramatically increased their life expectancy. To isolate the incentive effect, we use Danish register data on HIV-infected individuals and compare how outcomes evolved for individuals who were diagnosed before and after the medicine was introduced, but whose health had not yet been affected by their HIV diagnosis. Our results show that increases in the life expectancy of HIV-infected individuals greatly reduced the negative effect of receiving a HIV diagnosis on labor supply and earnings but did not affect important financial decisions, despite a much longer investment horizon. An increased life expectancy also affected marital behavior, where those facing a longer life expectancy where less likely to marry or cohabit after receiving a HIV diagnosis. Our results highlight that life expectancy gains from medical innovations impact individuals’ incentives to work and marry, even when their underlying health is unchanged.
    Keywords: Life Expectancy, Labor Supply, Marriage, HIV
    JEL: D84 I12 J12 J21
    Date: 2022–07–19
  3. By: Julie Moschion (University of Melbourne); Jan C. van Ours (Erasmus University Rotterdam)
    Abstract: This paper studies the relationship between early mental health episodes and early homelessness, focusing on depression and anxiety amongst disadvantaged Australians. Using data from the Australian Journeys Home survey, we investigate whether the early onset of mental health conditions make a first transition into homelessness more likely. Similarly, we analyse whether early experiences of homelessness increase the likelihood of early onset of depression or anxiety. We perform our analysis separately for men and women since there are gender differences in rates of both mental health diagnosis and homelessness. After accounting for the effects of joint observed and unobserved determinants, we find that a person’s first episode of depression makes a transition to homelessness more likely for both men and women. In contrast, anxiety disorders have no effect on the likelihood of experiencing homelessness. In addition, people’s first experience of homelessness has no effect on the likelihood of developing depression, but does increase the likelihood of anxiety disorders for men only.
    Keywords: Homelessness, mental health, depression, anxiety, mixed proportional hazard. model
    JEL: I12 I32
    Date: 2022–09–01
  4. By: Hall, Caroline (IFAU - Institute for Evaluation of Labour Market and Education Policy); Hardoy, Inés (Institutt for Samfunnsforskning,); von Simson, Kristine (Institutt for Samfunnsforskning,)
    Abstract: The rising numbers of young people with disability pension concerns many advanced economies. We present results from a comparative analysis of Sweden and Norway, two countries which are very similar in many respects, but differ regarding the policy mix to enhance the employability of the work disabled. Using rich longitudinal data, we follow unemployed young adults (aged 25-29 years old) with reduced work capacity to investigate the effect of different types of labour market policies. We follow these individuals up to four years after the start of unemployment. Our results indicate that, in spite of radical differences in programme composition and strategies, there are surprisingly small country differences in impacts. Having participated in workplace related programmes about doubles the likelihood of entering regular employment or education. Participating in qualifying training courses also increases this likelihood, but effect sizes are smaller.
    Keywords: Unemployment; labour market programmes; reduced work capacity; young adult;
    JEL: J08 J64 J68
    Date: 2022–09–07
  5. By: Yiran Han; Baris K. Yörük
    Abstract: More than 18 percent of U.S. adults met the diagnostic criteria for a mental illness. Yet, many who could benefit from mental health care do not receive any treatment, mostly due to the inability to pay for care or lack of health insurance coverage. How does a sudden change in health insurance coverage status affect psychological well-being and mental health? We explore this question using age-based health insurance coverage policies in the United States as natural experiments. We provide evidence that losing health insurance coverage at age 26 due to aging out from dependent coverage is associated with a statistically significant deterioration in certain indicators of mental health among young adults. On the other hand, we find no evidence of an improvement in mental health or psychological well-being among the elderly at age 65 due to becoming eligible for Medicare. These results are robust to potential changes in risk-taking behavior and physical health at the same age cutoffs.
    Keywords: Affordable Care Act, dependent coverage, health insurance, medicare, mental health, psychological well-being
    JEL: I12 I13 I18
    Date: 2022
  6. By: Chen, Xi
    Abstract: This paper reviews the latest evidence of the effects of early life circumstances on old-age health, distinguishing in utero exposures from childhood exposures to a wide range of environments. We then leverage the growing number of studies of the impact of the Great Chinese Famine (1959-1961) on the health of older adults to perform a meta-analysis and discuss potential mechanisms. Recent studies assembling multiple domains of early life circumstances are evaluated to better understand how various circumstances may coalesce and manifest in shaping long-term health.
    Keywords: Early life Circumstances,Old-age Health,Famine,Long-term Health,Meta-Analysis,China
    JEL: I14 J14 J13 I18
    Date: 2022
  7. By: Manasvini Singh; Atheendar Venkataramani
    Abstract: A growing literature has documented racial disparities in health care. We argue that racial disparities may be magnified when hospitals operate at capacity, when behavioral and structural conditions associated with poor patient outcomes – e.g., limited provider cognitive bandwidth or reliance on biased care algorithms – are aggravated. Using detailed, time-stamped electronic health record data from two large hospitals, we document that in-hospital mortality increased more for Black patients than for White patients when hospitals approached capacity. We estimate that 8.5% of Black patient deaths were capacity-driven and thus avoidable. We then investigate the extent to which differential care inputs explain our findings. While strain exacerbated wait times similarly for Black and White patients, Black patients both waited the longest at high strain and faced greater mortality consequences from prolonged wait times. Finally, the largest racial disparities in mortality were among women and uninsured patients, highlighting biases in provider behavior and hospital processes as key mechanisms driving our results.
    JEL: I10 I14 J15
    Date: 2022–08
  8. By: Anicet Fangwa; Caroline Flammer; Marieke Huysentruyt; Bertrand Quelin
    Abstract: How can non-profit organizations improve their governance to increase their social impact? This study examines the effectiveness of a bundle of governance mechanisms – consisting of social performance-based incentives combined with auditing and feedback – in the context of a randomized governance program conducted in the Democratic Republic of Congo's healthcare sector. Within the program, a set of health centers were randomly assigned to a governance treatment while others were not. We find that the governance treatment leads to i) higher operating efficiency and ii) improvements in health outcomes (measured by a reduction in stillbirths and neonatal deaths). Furthermore, we find that funding is not a substitute for governance – health centers that only receive funding increase their scale, but do not show improvements in operating efficiency nor health outcomes. Overall, our results suggest that governance plays an important role in achieving the non-profits' objectives and increasing the social impact of the funds invested.
    JEL: I0 I1 I2 O1
    Date: 2022–08
  9. By: Ponzo, Michela (University of Calabria); Scoppa, Vincenzo (University of Calabria)
    Abstract: In the standard neoclassical model consumers use all the available information and the demand for goods depends exclusively on preferences and prices whereas other spurious information do not play any role. In the market for books, we investigate if – in contrast to the standard model – the death of a writer has an impact on demand for his/her books, that is, we ask if consumers are affected by factors such as emotions and limited attention, as highlighted in behavioral economics. We use bestseller lists at week level for about 30 years (1975-2005) and through a Regression Discontinuity Design we evaluate the impact of a writer's death on the probability of entering in the bestseller list in the period immediately following his/her death. Controlling for age, gender, literary prizes, publishers' relevance and time dummies we find that a writer's death increases the probability of being in the bestseller list of more than 100%. Using a non-parametric RD approach we find very similar results. A number of robustness checks – changing the time window around the death, the estimation method, the outcome variable, the sample used – confirm our findings. In the attempt to investigate which mechanism drives consumers' decisions, we find a much greater impact for writers dying at an early age, for more famous writers and when the news is covered more extensively, suggesting that emotions and media attention are the main drivers of the impact.
    Keywords: book sales, writer's death, emotions, limited attention, salience, cultural economics, behavioral economics
    JEL: D91 Z10 Z11 L82 M30 D12
    Date: 2022–08
  10. By: Nandi, Arindam (The Population Council); Summan, Amit (One Health Trust); Ngô, D. Thoai (The Population Council); Bloom, David E. (Harvard University)
    Abstract: Childhood vaccines can increase population growth in the short term by improving the survival rates of young children. Over the long run, reductions in child mortality rates are associated with lower demand for children and fertility rates (known as "demographic transition"). Vaccines can potentially aid demographic transition by lowering child mortality and improving future health, schooling, and labor market outcomes of vaccinated mothers, but these long-term demographic benefits remain untested. In this study, we examine the demographic effects of India's national childhood vaccination program (the Universal Immunization Programme or UIP). We combine data on the district-wise rollout of UIP during 1985–1990 with fertility preference data of 625,000 adult women from the National Family Health Survey of India 2015–2016. We include women who were born five years before and after the rollout period (1980–1995) and were cohabiting with a partner at the time of the survey. We divide these 20-36-year-old women into two groups: those who were exposed to UIP at birth (treatment group) and those who were born before the program (control group). After controlling for individual- and household-level factors and age and district fixed effects, treatment group women are 2% less likely to have at least one child and want 2% fewer children in their lifetime as compared with the control group. The negative effect on at least one childbirth is larger for more educated and richer women, while the effect on the desired number of children is larger for uneducated and poorer women.
    Keywords: India, UIP, demographic transition, demand for fertility
    JEL: I15 J13 J18 I10
    Date: 2022–08
  11. By: Lin, Zhuoer; Chen, Xi
    Abstract: Rapid population aging elevates burden of chronic and non-communicable diseases among older adults. Despite the critical role of self-management in disease prevention and control, effective management of diseases can be cognitively demanding and may require additional supports from family and social services. Using nationally representative data from China, this paper reveals great challenges in disease management and characterizes the differential effects of long-term care services and supports (LTSS) on disease management among older adults in different stages of cognitive impairment (CI). In specific, we use preventive care utilization and hypertension management as key indicators to assess the performance of disease management. We show that while access to LTSS from spouse or home-based services significantly facilitate active disease management behaviors, the effects are only evident among older adults with no CI. By contrast, access to LTSS has very modest effect for cognitively impaired individuals. In addition, older adults in more severe stages of CI perform worse in disease prevention, hypertension awareness and management. These findings reveal the vulnerability of older adults with CI in disease management and point to the importance of promoting targeted interventions to reduce barriers of accessing LTSS, especially among cognitively impaired population.
    Keywords: Long-term Services and Supports,Chronic Disease Management,Cognitive Impairment,Preventive Care Utilization,Disease Awareness,Hypertension
    Date: 2022
  12. By: Charles Yuji Horioka (Center for Social Systems Innovation and Research Institute for Economics and Business Administration, Kobe University, Asian Growth Research Institute, Institute of Social and Economic Research, Osaka University, and National Bureau of Economic Research, JAPAN); Luigi Ventura (Department of Economics and Law, Sapienza, University of Rome, ITALY)
    Abstract: In this paper, we use micro data on a large number of European countries from the Survey of Health, Ageing and Retirement in Europe (SHARE) to examine the wealth accumulation (saving) behavior of the retired elderly in Europe. To summarize our main findings, we find that less than half of the retired elderly in Europe are decumulating their wealth and that the average wealth accumulation rate of the retired elderly in Europe is positive though relatively moderate (6.6% over a 3-year period). These findings strongly suggest that the Wealth Decumulation (or Retirement Saving) Puzzle (the tendency of the retired elderly to not decumulate their wealth or to decumulate their wealth more slowly than expected) applies in the case of Europe. Moreover, our regression results suggest that bequest motives, generous public pension systems, and the reluctance of retired elderly homeowners to sell or borrow against their owner-occupied housing are the primary explanations for the existence of the Wealth Decumulation Puzzle in Europe.
    Keywords: Aged; Bequests; Bequest intentions; Bequest motives; Dissaving; Elderly; Europe; Household saving; Inheritances; Intergenerational transfers; Life cycle model or hypothesis; Precautionary saving; Retired elderly; Retirement Saving Puzzle; saving; SHARE; Wealth accumulation; Wealth decumulation; Wealth Decumulation Puzzle
    JEL: D14 D15 E21 H55 J14
    Date: 2022–09
  13. By: Katherine de Bienassis (OECD); Laura Esmail (OECD); Ruth Lopert (OECD); Niek Klazinga (OECD)
    Abstract: Poor medication practices and inadequate system infrastructure—resulting in poor adherence, medication-related harms, and medication errors—too often results in patient harm. As many as 1 in 10 hospitalizations in OECD countries may be caused by a medication-related event and as many one in five inpatients experience medication-related harms during hospitalization. Together, costs from avoidable admissions due to medication-related events and added length of stay due to preventable hospital-acquired medication-related harms total over USD 54 billion in OECD countries. This report includes four components; it 1) assess the human impact and economic costs of medication safety events in OECD countries, 2) explores opportunities to improve prescribing practices 3) examines the state-of-the art in systems and policies for improving medication safety, and 4) provides recommendations for improving medication safety at the national level.
    JEL: H51 I11 I18 L86
    Date: 2022–09–14
  14. By: Vinitha Varghese
    Abstract: I evaluate the impact of the right to education from the passing of the Right to Education Act in India in 2009. This Act guaranteed free education to children aged 6-14 years, including children with disabilities. Given that the school participation deficit associated with disability is large, I provide results that are a relief to policy-makers. I use an event study estimation and an interrupted time series research design and find that the Right to Education Act led to a 60 per cent increase in schooling among children with disabilities within three years.
    Keywords: People with disabilities, Children, Education, Enrolment, Schooling
    Date: 2022
  15. By: Ida Lykke Kristiansen (CEBI, Department of Economics, University of Copenhagen); Sophie Yanying Sheng (University of California San Diego)
    Abstract: We investigate whether primary care physician and patient concordance in terms of socio-economic status (SES) reduces the SES inequality in health. We measure physicians’ SES by their childhood SES and find that SES concordance decreases low-SES patients’ mortality, while high-SES patients’ mortality does not depend on their physicians’ background. Together, they translate to a 24% reduction in the SES-mortality gradient. SES concordance changes the health behavior of the patient and increases treatment of chronic conditions: low-SES patients with low-SES physicians receive more care at the intensive margin, have a higher detection of chronic conditions, and have higher adherence to treatment.
    Keywords: health inequality, physician practice style, intergenerational transmission, family background, socio-economic status, health behaviors
    JEL: I12 I14 J62
    Date: 2022–07–01
  16. By: Johanna Etner (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique); Josselin Thuilliez (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Hippolyte d'Albis (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: We provide one of the first formalizations of a vaccination campaign in a decisiontheoretic framework. We analyse a model where an ambiguity-averse individual must decide how much effort to invest into prevention in the context of a rampant disease. We study how ambiguity aversion affects the effort and the estimation of the vaccine efficacy in clinical trials and immunization campaigns. We find that the behaviours of individuals participating in a clinical trial differ from individuals not participating. Individuals who are more optimistic toward vaccination participate more in trials. Their behaviours and efforts are also affected. As a result, because vaccine efficacy depends on unobserved behaviours and efforts, the biological effect of the vaccine becomes difficult to evaluate. During the scale-up phase of a vaccination campaign, provided that vaccine efficacy is established, we show that vaccine hesitancy may still be rational.
    Keywords: Decision Theory,Vaccination,Clinical Trials,Immunization Campaigns Decision Theory,Immunization Campaigns
    Date: 2022–08
  17. By: Florian Bonnet (INED - Institut national d'études démographiques); Hippolyte d'Albis (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Josselin Thuilliez (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Influenza mortality has dramatically decreased in France since the 1950s. Annual death rates peaked during two pandemics: the Asian flu (1956-57) and the Hong-Kong flu (1969-1970). This study's objective is to evaluate whether the second pandemic created a structural change in the dynamics of influenza mortality in France. We employ a new database on influenza mortality since 1950 at the subnational level (90 geographic areas) to estimate statistical models to find whether a structural change happened and to explain the differences in mortality rates across geographic areas. Influenza mortality increased between 1950 and 1969, and decreased from 1970 onward. The Hong-Kong flu is identified as the event of a structural break. After the break, geographical differences are less explained by regional characteristics such as income, density or aging ratio. Hong Kong flu was found to be associated with a major change in influenza mortality in France. Change in health practices and policies induced a decline in mortality that started in 1970, just after the pandemics. The health benefits are notably important for senior citizens and for the poorest regions.
    Date: 2022–08
  18. By: Pascal St-Amour (University of Lausanne - School of Economics and Business Administration (HEC-Lausanne); Swiss Finance Institute)
    Abstract: The twin arguments of (i) protecting society's most vulnerable members (e.g. agents with pre-existing medical conditions, elders) from life-threatening complications and (ii) avoiding delicate medical triage decisions were often used to warrant the substantial reallocation of economic and health care resources during the COVID-19 pandemic. These justifications raise the non-trivial arbitrage between the value of lives saved by intervention vs (i) the opportunity cost of engaged resources and vs (ii) other present or future lives affected by prioritizing a single illness. This paper solves in closed- form a flexible life cycle (LC) model of consumption, leisure and health choices to characterize the shadow value of life along the (i) person-specific (age, health, labour income, wealth, preferences) and (ii) mortality risk-specific (beneficial vs detrimental, temporary vs permanent changes) dimensions. The model is calibrated to reproduce observed household LC dynamics and yields plausible out-of-sample life values with a quality-adjusted life year (QALY) estimates between 95 and 115K$ and a Value of Statistical Life (VSL) close to 6.0M$. It identifies symmetric willingness to pay (WTP) and to accept (WTA) compensation for one-shot beneficial vs detrimental changes in longevity. Permanent changes yield asymmetric responses with larger willingness in the gains relative to loss domain and larger selling (WTA) relative to buying (WTP) prices for longevity. Ageing lowers both the value of and responsiveness to changes in longevity via falling resources and health and marginal continuation utility of living.
    Keywords: Value of Human Life, Value of Statistical Life, Gunpoint Value, Deterministic Longevity Value, Hicksian Compensating and Equivalent Variations, Willingness to Pay, Willingness to Accept Compensation, Mortality, Longevity, Non-Expected Utility.
    JEL: J17 D15 G11
    Date: 2022–08
  19. By: Celidoni, Martina (University of Padova); Costa-Font, Joan (London School of Economics); Salmasi, Luca (Catholic University - Rome)
    Abstract: Longevity expectations (LE) are subjective assessments of future health status that can influence a number of individual health protective decisions. This is especially true during a pandemic such as COVID-19, as the risk of ill health depends more than ever on such protective decisions. This paper exploits differences in LE to examine the causal effect of LE on protective health behaviours and a number of decisions around access to health care, using data from the Survey of Health Ageing and Retirement in Europe. We draw on an instrumental variable strategy exploiting individual level information on parental age at death. Consistent with the too healthy to be sick hypothesis, we find that individuals with higher expected longevity are more likely to engage in protective behaviours, and are less likely to forgo medical treatment. We estimate that a one standard deviation increase in expected longevity increases the probability to comply always with social distancing by 0.6%, to meet people less often by 0.4% and decreases the probability to forgo any medical treatment by 0.6%. Our estimates vary depending on the availability of health care, as well as individuals' gender and pre-existing health conditions.
    Keywords: health capital, forgone medical treatment, health behaviours, private information, longevity expectations, SHARE, Europe, instrumental variables, COVID-19
    JEL: I12 I18
    Date: 2022–08

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