I had the pleasure of presenting our research, ‘Social Interactions and Private Health Insurance Demand’ (collaborative work with Alicia N. Rambaldi and Christiern Rose) at the Monash University Centre for Health Economics. This paper is part of my PhD Thesis, to be soon submited to a journal.

Abstract

We use unique employee-employer data from Australia to examine the effect of co-worker health condition on the demand for private health insurance. Our setting is well suited to this research question due to the institutional environment (e.g., community rated premiums, small firm sizes) and the quality of the administrative data we use, which allows us to link individual level tax data with healthcare utilization and firm level data. Our identification strategy exploits data over two consecutive financial years, allowing us to analyze transitions into and out of private health insurance, as well as to control for the initial insurance status of co-workers. We find consistent evidence that negative health shocks to co-workers increase the demand for insurance among those who do not already have it. We also find that females, those who do not have a spouse, and older individuals tend to be more responsive to co-worker health, and that more severe or frequent health shocks to co-workers have a stronger impact on insurance demand.