The Effects of Health Insurance on the Intergenerational Transmission of Socioeconomic Status: Evidence from Eligibility Expansions in Five European Countries

The intergenerational transmission of health and socioeconomic status (SES) is well established in existing literature, with parental health and SES affecting early-life health of offspring, and this early-life health then affecting an individual’s adult health and SES, thus completing the cycle to childbearing age. Therefore, improving early-life health among population segments with low SES has been identified as a potential method for reducing the transmission of poverty from one generation to the next. Health insurance is a policy option for improving early-life health, because it can improve access to medical care by removing financial barriers. A policy’s effect on access can be obstructed, however, if obstacles such as geographic barriers prevent the newly insured from utilizing medical care.                                                                         

In order to evaluate the effectiveness of health insurance in interrupting the intergenerational transmission of socioeconomic status, this paper examines the effects of health insurance eligibility on educational attainment. Specifically, I assess the impact of five European policy changes that expanded insurance eligibility to farmers: Austria 1965, France 1961, Greece 1961, Italy 1955, and Poland 1972. My analyses use pan-European quadruple-differences regressions and country specific triple-differences regressions to identify policy effects on the educational attainment of children born to the newly covered farmers. The sample is the children born in the years 1945-1979 to respondents of the Survey of Health, Ageing, and Retirement in Europe (SHARE). In order to assess the importance of geographic barriers to care, I allow for differential effects of policies in rural versus non-rural regions.

Results suggest that some of these policy changes improved educational outcomes of the farmers’ children, but only in cases where the farmers lived in relatively densely populated regions. Across countries, the Greek policy change showed the strongest evidence of an effect, with Austria and Italy showing weaker evidence of similar effects. In all countries, there was no evidence of an effect of health insurance on children’s educational attainment in less densely populated regions. This suggests that for policies seeking to increase health care utilization by expecting mothers and young children, geographic barriers can be a significant problem. This could be especially true in middle-income and developing countries, where medical services may be undersupplied in rural areas, making the removal of financial barriers to care insufficient for effects of insurance to be realized.