Working Paper: CEPR ID: DP13753
Authors: Corina Mommaerts; Syed Hassan Raza; Yu Zheng
Abstract: This paper estimates the effect of hospital admissions among older workers on economic outcomes across countries. We use harmonized longitudinal survey data from the United States, China, and 13 countries in Europe, and follow the event study design of Dobkin, Finkelstein, Kluender and Notowidigdo (2018) to estimate dynamic effects of a hospitalization on out-of-pocket health expenditures, labor market outcomes, social insurance payments, and household income. We find distinctly different patterns across countries. In contrast to the United States, where hospitalizations lead to large health expenditures and decreases in earnings, individuals in Northern and Southern Europe are largely protected from negative economic outcomes. Hospitalizations in China lead to even larger out-of-pocket expenditures as a percent of prior income, but do not negatively affect labor market outcomes. Our results largely align with the differences in generosity across countries in social protection institutions that include health systems, social security programs and labor market regulations.
Keywords: health shocks; medical spending; healthcare system; social insurance program; labor market protection; cross-country differences
JEL Codes: E21; H53; I13; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Hospitalizations (I19) | Out-of-pocket medical expenditures (H51) |
| Hospitalizations (I19) | Respondent earnings (J31) |
| Hospitalizations (I19) | Out-of-pocket medical expenditures (Northern and Southern Europe) (H51) |
| Hospitalizations (I19) | Total income (Northern and Southern Europe) (N93) |
| Hospitalizations (I19) | Out-of-pocket costs (China) (H49) |
| Hospitalizations (I19) | Labor market outcomes (China) (F66) |
| Social protection systems (H55) | Economic impacts from hospitalizations (F69) |
| Disability and sick pay programs (H55) | Labor market consequences of hospitalizations (J29) |