The Upward Spillover Effects of Free Child Healthcare

This study empirically examines whether eliminating out-of-pocket payments for children's medical care generates upward spillover effects on parental mental health and compares these effects with those of free school lunch programs. Using repeated cross-sectional data from Aomori Prefecture collected in 2018 and 2023, we estimate the effects using DID and DRDID estimators. The results show that eliminating medical cost sharing for child healthcare did not significantly improve children's health or healthcare access, but it reduced parental psychological distress, particularly among households in the upper half of the income distribution. Compared with free school lunch programs, the estimated upward spillover effect was smaller but free child healthcare may be more cost-effective after accounting for fiscal costs. Mediation analysis further indicates that free child healthcare increased parental involvement with children at home, whereas free school lunches promoted parental participation in school and community activities. These findings suggest that evaluations of child-targeted policies should consider not only direct effects on children but also upward spillover effects on parents.