Description: Department Seminar Macro/Micro Group: Zhigang Feng (University of Nebraska) 

Location: 360 Heady Hall

Contact Person: Juan Carlos Cordoba

Title:  Health, Health Insurance, and Ineqaulity

Abstract: This paper identifies a“health premium”of insurance coverage that the insured ismore likely to stay healthy or recover from unhealthy status. We introduce this fea-ture into the prototypical macro-health model and estimate the baseline economy bymatching the observed joint distribution of health insurance purchase, health statusand income over the life cycle. Quantitative analysis reveals that an individual’s insur-ance status has significant and persistent impact on health, which will be reinforced byand subsequently amplify the feedback effect of health on labor earnings and incomeinequality. Providing“Universal Health Coverage”would narrow health and life ex-pectancy gaps, with a mixed effect on income distribution in absence of any additionalredistribution of income or wealth