Peace of Mind: Health Insurance Reduces Stress and Cortisol Levels


We show that the provision of health insurance reduces levels of self-reported stress and the stress hormone cortisol using a randomized controlled trial among informal workers in Nairobi, Kenya. The effects of health insurance on cortisol and stress levels are larger than those of equally valued unconditional cash transfers, and are not mediated by changes in economic outcomes, health or healthcare usage, or variables that confound cortisol. These results suggest that insurance may reduce stress and cortisol levels through a “peace of mind” effect. This hypothesis receives support from the fact that the median insurance taker does not use the insurance; that insurance has larger effects on more vulnerable individuals; and that insurance improves sleep.

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    Johannes Haushofer, Matthieu Chemin, Chaning Jang, Justin Abraham (2017)
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