NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Health Insurance Coverage and the Macroeconomy

John Cawley, Kosali I. Simon

NBER Working Paper No. 10092
Issued in November 2003
NBER Program(s):   HE

The primary objective of this paper is to improve our understanding of the historic relationship between state and national macroeconomic climate and the health insurance coverage of Americans. The secondary objective of this paper is to use the historic findings to estimate how the number of uninsured Americans changed during the 2001 recession, and to estimate whether to date enough people have gained health insurance during the current recovery to offset the losses during the recession. We conclude that the macroeconomy (measured by state unemployment rate and real gross state product) is correlated with the probability of men's health insurance coverage and that this correlation is only partly explained by changes in men's employment status. Counter-cyclical health insurance programs such as Medicaid and the State Children's Health Insurance Program seem to ensure that the health insurance coverage of women and children is insulated from macroeconomic changes. We estimate that 851,000 Americans, the vast majority of whom were adult men, lost health insurance due to macroeconomic conditions alone during the 2001 recession.

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Published: Cawley, John, and Kosali I. Simon. "Health Insurance Coverage and the Macroeconomy." Journal of Health Economics, March 2005, 24(2): 299-315.

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