IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_11074.html
   My bibliography  Save this paper

The Effects of Medical Debt Relief: Evidence from Two Randomized Experiments

Author

Listed:
  • Raymond Kluender
  • Neale Mahoney
  • Francis Wong
  • Wesley Yin

Abstract

Two in five Americans have medical debt, nearly half of whom owe at least $2,500. Concerned by this burden, governments and private donors have undertaken large, high-profile efforts to relieve medical debt. We partnered with RIP Medical Debt to conduct two randomized experiments that relieved medical debt with a face value of $169 million for 83,401 people between 2018 and 2020. We track outcomes using credit reports, collections account data, and a multimodal survey. There are three sets of results. First, we find no impact of debt relief on credit access, utilization, and financial distress on average. Second, we estimate that debt relief causes a moderate but statistically significant reduction in payment of existing medical bills. Third, we find no effect of medical debt relief on mental health on average, with detrimental effects for some groups in pre-registered heterogeneity analysis.

Suggested Citation

  • Raymond Kluender & Neale Mahoney & Francis Wong & Wesley Yin, 2024. "The Effects of Medical Debt Relief: Evidence from Two Randomized Experiments," CESifo Working Paper Series 11074, CESifo.
  • Handle: RePEc:ces:ceswps:_11074
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo1_wp11074.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Will Dobbie & Jae Song, 2015. "Debt Relief and Debtor Outcomes: Measuring the Effects of Consumer Bankruptcy Protection," American Economic Review, American Economic Association, vol. 105(3), pages 1272-1311, March.
    2. Anderson, Michael L, 2008. "Multiple Inference and Gender Differences in the Effects of Early Intervention: A Reevaluation of the Abecedarian, Perry Preschool, and Early Training Projects," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt15n8j26f, Department of Agricultural & Resource Economics, UC Berkeley.
    3. Peter Ganong & Pascal Noel, 2020. "Liquidity versus Wealth in Household Debt Obligations: Evidence from Housing Policy in the Great Recession," American Economic Review, American Economic Association, vol. 110(10), pages 3100-3138, October.
    4. Abhijit Banerjee & Paul Niehaus & Tavneet Suri, 2019. "Universal Basic Income in the Developing World," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 959-983, August.
    5. Alyce Adams & Raymond Kluender & Neale Mahoney & Jinglin Wang & Francis Wong & Wesley Yin, 2022. "The Impact of Financial Assistance Programs on Health Care Utilization: Evidence from Kaiser Permanente," American Economic Review: Insights, American Economic Association, vol. 4(3), pages 389-407, September.
    6. Ing-Haw Cheng & Felipe Severino & Richard R Townsend & Stijn Van Nieuwerburgh, 2021. "How Do Consumers Fare When Dealing with Debt Collectors? Evidence from Out-of-Court Settlements [Why don’t lenders renegotiate more home mortgages? Redefaults, self-cures and securitization]," The Review of Financial Studies, Society for Financial Studies, vol. 34(4), pages 1617-1660.
    7. Anderson, Michael L., 2008. "Multiple Inference and Gender Differences in the Effects of Early Intervention: A Reevaluation of the Abecedarian, Perry Preschool, and Early Training Projects," Journal of the American Statistical Association, American Statistical Association, vol. 103(484), pages 1481-1495.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christa N. Gibbs & Benedict Guttman-Kenney & Donghoon Lee & Scott Nelson & Wilbert Van der Klaauw & Jialan Wang, 2024. "Consumer Credit Reporting Data," Staff Reports 1114, Federal Reserve Bank of New York.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Raymond Kluender & Neale Mahoney & Francis Wong & Wesley Yin, 2024. "The Effects of Medical Debt Relief: Evidence from Two Randomized Experiments," NBER Working Papers 32315, National Bureau of Economic Research, Inc.
    2. de Bruijn, Ernst-Jan & Vethaak, Heike & Koning, Pierre & Knoef, Marike, 2023. "Debt Relief for the Financially Vulnerable: Impact on Employment, Welfare Receipt, and Mental Health," IZA Discussion Papers 16336, Institute of Labor Economics (IZA).
    3. Cantoni, Enrico & Gazzè, Ludovica & Schafer, Jerome, 2021. "Turnout in concurrent elections: Evidence from two quasi-experiments in Italy," European Journal of Political Economy, Elsevier, vol. 70(C).
    4. Sant’Anna, Pedro H.C. & Zhao, Jun, 2020. "Doubly robust difference-in-differences estimators," Journal of Econometrics, Elsevier, vol. 219(1), pages 101-122.
    5. Stephen B. Billings & Mark Hoekstra, 2019. "Schools, Neighborhoods, and the Long-Run Effect of Crime-Prone Peers," NBER Working Papers 25730, National Bureau of Economic Research, Inc.
    6. Jessamyn Schaller & Mariana Zerpa, 2019. "Short-Run Effects of Parental Job Loss on Child Health," American Journal of Health Economics, MIT Press, vol. 5(1), pages 8-41, Winter.
    7. Goda, Gopi Shah & Levy, Matthew R. & Flaherty Manchester, Colleen & Sojourner, Aaron & Tasoff, Joshua & Xiao, Jiusi, 2023. "Are retirement planning tools substitutes or complements to financial capability?," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 561-573.
    8. Elad DeMalach & Analia Schlosser, 2024. "Short- and Long-Term Effects of Universal Preschool: Evidence from the Arab Population in Israel," CESifo Working Paper Series 10904, CESifo.
    9. Lasse J. Jessen & Sebastian Koehne & Patrick Nüß & Jens Ruhose, 2024. "Socioeconomic Inequality in Life Expectancy: Perception and Policy Demand," CESifo Working Paper Series 10940, CESifo.
    10. Romain Gauriot Author e-mail: romain.gauriot@nyu.edu & Lionel Page Author e-mail: lionel.page@uts.edu.au, 2021. "How Market Prices React to Information: Evidence from Binary Options Markets," Working Papers 20200058, New York University Abu Dhabi, Department of Social Science, revised Oct 2021.
    11. Norma B. Coe & Jing Guo & R. Tamara Konetzka & Courtney Harold Van Houtven, 2019. "What is the marginal benefit of payment‐induced family care? Impact on Medicaid spending and health of care recipients," Health Economics, John Wiley & Sons, Ltd., vol. 28(5), pages 678-692, May.
    12. repec:ags:aaea22:335612 is not listed on IDEAS
    13. Michael L. Anderson & Fangwen Lu, 2017. "Learning to Manage and Managing to Learn: The Effects of Student Leadership Service," Management Science, INFORMS, vol. 63(10), pages 3246-3261, October.
    14. Apps, Patricia & Mendolia, Silvia & Walker, Ian, 2013. "The impact of pre-school on adolescents’ outcomes: Evidence from a recent English cohort," Economics of Education Review, Elsevier, vol. 37(C), pages 183-199.
    15. Banerjee, Abhijit & Barnhardt, Sharon & Duflo, Esther, 2018. "Can iron-fortified salt control anemia? Evidence from two experiments in rural Bihar," Journal of Development Economics, Elsevier, vol. 133(C), pages 127-146.
    16. Emilio Depetris-Chauvin & Ömer Özak, 2020. "The origins of the division of labor in pre-industrial times," Journal of Economic Growth, Springer, vol. 25(3), pages 297-340, September.
    17. Takao Kato & Yang Song, 2022. "Advising, gender, and performance: Evidence from a university with exogenous adviser–student gender match," Economic Inquiry, Western Economic Association International, vol. 60(1), pages 121-141, January.
    18. Fernández Guerrico, Sofía, 2021. "The effects of trade-induced worker displacement on health and mortality in Mexico," Journal of Health Economics, Elsevier, vol. 80(C).
    19. Daniel Bjorkegren & Joshua Blumenstock & Omowunmi Folajimi-Senjobi & Jacqueline Mauro & Suraj R. Nair, 2022. "Instant Loans Can Lift Subjective Well-Being: A Randomized Evaluation of Digital Credit in Nigeria," Papers 2202.13540, arXiv.org.
    20. Cygan-Rehm, Kamila & Karbownik, Krzysztof, 2022. "The effects of incentivizing early prenatal care on infant health," Journal of Health Economics, Elsevier, vol. 83(C).
    21. Dahmann, Sarah C., 2017. "How does education improve cognitive skills? Instructional time versus timing of instruction," Labour Economics, Elsevier, vol. 47(C), pages 35-47.

    More about this item

    Keywords

    debt relief; medical debt; health care; mental health; access to credit;
    All these keywords.

    JEL classification:

    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • I10 - Health, Education, and Welfare - - Health - - - General
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_11074. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.