Debtor Protection and Health Insurance: Evidence From Personal Bankruptcy Reform

Paolo Nicola Barbieri, Laura Bottazzi and Giuseppe Di Giacomo

No 12388, CESifo Working Paper Series from CESifo

Abstract: We investigate how the use of bankruptcy as an implicit health insurance varies across households, focusing on heterogeneity by asset holdings, race, marital status, and educational attainment. Using a difference-in-differences design based on the 2005 bankruptcy reform, we find that the reform modestly increased health insurance coverage among middle-income households unlikely to lose assets under Chapter 7, with stronger effects for married and less educated households. The reform primarily affected White households, suggesting racial disparities in bankruptcy use. Treated households also showed increased healthcare utilization and spending. These heterogeneous effects highlight how the reform may have deepened existing health and financial inequalities.

Keywords: health insurance; bankruptcy reform; consumer protection (search for similar items in EconPapers)
JEL-codes: D18 H51 I13 K35 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_12388

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