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Economics Research International
Volume 2012 (2012), Article ID 231473, 10 pages
http://dx.doi.org/10.1155/2012/231473
Research Article

Why Did Americans Reject Compulsory Health Insurance after WWI? An Application of the Lifecycle Model

1Department of Economics, University of Regina, Regina, SK, Canada S4S 0A2
2Department of Economics, University of Calgary, Calgary, AB, Canada T2N 1N4

Received 31 August 2011; Accepted 2 November 2011

Academic Editor: Thanasis Stengos

Copyright © 2012 Stuart J. Wilson and J. C. Herbert Emery. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Progressive reformers failed to gain support to implement compulsory health insurance in the US after WWI. Modeling results presented in this paper, using a lifecycle model with sickness risk and precautionary savings, support the conclusion that existing voluntary insurance plans were adequate and welfare-enhancing in the US, that compulsory health insurance as proposed would not be welfare-enhancing, and that Americans' preference to self-insure during most of their working lives was rational, utility-maximizing behaviour.