BORROWING TO COPE WITH ADVERSE HEALTH EVENTS: LIQUIDITY CONSTRAINTS, INSURANCE COVERAGE, AND UNSECURED DEBT
Article first published online: 15 OCT 2012
Copyright © 2012 John Wiley & Sons, Ltd.
Volume 22, Issue 10, pages 1177–1198, October 2013
How to Cite
Babiarz, P., Widdows, R. and Yilmazer, T. (2013), BORROWING TO COPE WITH ADVERSE HEALTH EVENTS: LIQUIDITY CONSTRAINTS, INSURANCE COVERAGE, AND UNSECURED DEBT. Health Econ., 22: 1177–1198. doi: 10.1002/hec.2877
- Issue published online: 11 SEP 2013
- Article first published online: 15 OCT 2012
- Manuscript Accepted: 10 SEP 2012
- Manuscript Revised: 24 JUL 2012
- Manuscript Received: 30 MAR 2011
- unsecured debt;
- health shocks;
- health insurance
This article uses data from the Health and Retirement Study for 1998–2010 to investigate whether households respond to the financial stress caused by health problems by increasing their unsecured debt. Results show both the probability of having unsecured debt and the amount of debt increase after an adverse health event among households with low financial assets, who are uninsured, or who have less generous health insurance. The effect of health problems on borrowing is caused by both medical expenditures and disruptions to the income stream. Unsecured debt seems to remain on some households' balance sheets for an extended period. Copyright © 2012 John Wiley & Sons, Ltd.