Health Insurance and Fertility: Evidence from the Advent of Blue Cross
Job Market Paper
After decades of decline, U.S. fertility began to rise in the mid-1930s, well before the postwar Baby Boom. At the same time, employer-sponsored health insurance was expanding nationwide for the first time. Did the emergence of employer-sponsored hospital insurance contribute to this reversal? I construct a new dataset documenting the staggered geographic rollout of Blue Cross hospital plans and their enrollment and link it to county-level data on hospital births and vital statistics. Using both stacked difference-in-differences and an instrumental variables designs, I find that Blue Cross entry increased insurance enrollment and hospital childbirth. Hospital births rose by 0.37 per 100 women aged 15--44, with little evidence of a corresponding decline in non-hospital births. Total fertility also increased, although the estimate is imprecise. The effects are larger in areas with higher baseline medical costs, suggesting that the financial cost of childbirth played an important role. Meanwhile, infant and maternal mortality show little change. Blue Cross contributed meaningfully to the mid-1930s fertility decline reversal in the United States, highlighting how health-care policy can shape demographic outcomes beyond its direct effects on medical care.