Hispanic Household Economic Decisions

Paper Session

Friday, Jan. 6, 2017 10:15 AM – 12:15 PM

Hyatt Regency Chicago, Atlanta
Hosted By: American Society of Hispanic Economists & National Economic Association
  • Chair: Joseph Guzman, Michigan State University

Determinants of Private Health Insurance Coverage Among Mexican-American Women, 2010-2014

Richard Santos
,
University of New Mexico
David van der Goes
,
University of New Mexico

Abstract

Most Americans obtain private health insurance for themselves and their families through the workplace. According to the National Health Interview Survey in 2014, the reverse is true for Mexican Americans, with less than a majority (40%) covered by private insurance. Using a national sample of adults age 18-64 from the 2010-2014 National Health Interview Survey (NHIS), we estimate that only 53 percent of the Mexican American women in the labor force are covered by private health insurance coverage as compared to 80 percent of other non-Mexican origin women. Attention is given to the private health insurance coverage for Mexican American women in the work place because less is known about their determinants of coverage in comparison to men. Understanding the determinants of private health insurance coverage for Mexican American women in the labor force is also important because of their emerging presence in the national workforce. Hispanic women of which Mexican Americans are the largest group are projected to account for nearly one fifth of the women labor force in the U.S. by 2022. (U.S. Census Bureau, Hispanic Women in the Labor Force, 2014). Research on the determinants of private health insurance coverage for women in the labor force presents a challenge; women may obtain private insurance coverage because of spouse or dependent coverage in the workplace and the eligibility requirements of Medicaid coverage favored women prior to the Affordable Care Act. Nevertheless, a study on the major determinants of private insurance coverage of Mexican American women will provide a useful benchmark to assess their low coverage of private health insurance coverage. Specifically, what accounts for the difference in private insurance coverage between Mexican American women and other workers?

Understanding the Racial/Ethnic Gap in Bank Account Ownership Among Older Adults

Luisa Blanco
,
Pepperdine University
Emma Aguila
,
University of Southern California
Marco Angrisani
,
University of Southern California

Abstract

We investigate what factors contribute to the racial/ethnic gap in bank account ownership among older adults. We draw a sample of individuals age 51-90 from the Health and Retirement Study (HRS) observed over the period 2000-2012. We employ panel data estimation techniques and the Blinder-Oaxaca (BO) decomposition to identify and assess the importance of barriers preventing minority groups, specifically Blacks and Hispanics, from accessing financial services. We document that minority older adults are significantly less likely to own a bank account than their White counterparts. This gap is substantially larger for Hispanics than for Blacks. Among the determinants of such gap, we find that health, cognitive ability, being foreign born and legal immigration status (proxied by the consent for sharing Social Security number with HRS) play a limited role explaining the gap for both minority groups. On the other hand, lack of English proficiency accounts for most of the difference in bank account ownership between Whites and Hispanics. The BO decomposition reveals that, altogether, factors such as health, cognitive ability and cultural barriers increase the ability of the model to explain differential bank account ownership by approximately 30% for Hispanics and 15% for Blacks. We also show that the mediating effect of these factors is heterogeneous and varies with the socio-economic status characteristics of the neighborhood as well as with the levels of income and wealth of the household.

How Children With Disabilities Affect Household Investment Decisions

Vicki Bogan
,
Cornell University
Jose M. Fernandez
,
University of Louisville

Abstract

We analyze how children with mental disabilities influence parental portfolio allocation. We find that risky asset holding decreases among households with special needs children. However, conditional on participating in the market, households with special needs children invest a larger portion of their wealth in risky assets. As risky asset holding is a key component of wealth building, these findings have important implications for both policy and household wealth inequality.

Consumption Smoothing and Frequency of Benefit Payments of Cash Transfer Programs

Emma Aguila
,
University of Southern California
Arie Kapteyn
,
University of Southern California
Francisco Perez-Arce
,
RAND Corporation

Abstract

According to the Life Cycle Hypothesis (LCH), an individual smoothes marginal utility of consumption across periods to maximize utility during his or her life span. There is a large literature that has found that predictable changes in income should not affect consumption (e.g. Hall, 1978). However, various studies have documented that individuals or households with little savings do not smooth their consumption between social security checks. Rather, consumption tends to peak when the check arrives and then falls until the arrival of the next check. This pattern is found both for expenditures (Stephens, 2003; Stephens, 2006) and for caloric intake (Shapiro, 2005; Mastrobuoni and Weinberg, 2009). According to the LCH, frequency of benefits payments should not affect consumption smoothing between paychecks. We exploit a rich panel data set equivalent to the Health and Retirement Survey (HRS) to examine the extent of consumption smoothing between paychecks among elderly households in the noncontributory pension program disbursed every month and every two months. We also analyze the effects of the programs on household food expenditure, durables, health care, food availability, labor supply, family transfers, and subjective wellbeing. We find that the monthly program seems to be more effective on smoothing food expenditure than the bimonthly program. Compared to the bimonthly program, the monthly program increased doctor visits, reduced the incidence of hunger spells, and lessened the need for support from charities. Under the bimonthly program, expenditures on food and beverages significantly decreased near the end of the pay-cycle, while in comparison with the monthly program ownership of durable goods are higher. The results suggest that frequency of benefit payments is an important design feature of social programs.
Discussant(s)
Andres Vargas
,
Purdue University
Pia Orrenius
,
Federal Reserve Bank of Dallas
Alfonso Flores-Lagunes
,
Syracuse University
William A. Darity, Jr.
,
Duke University
JEL Classifications
  • I0 - General
  • J1 - Demographic Economics