Health Insurance Coverage for Low-income Households: Consumption Smoothing and Investment

Kai Liu

No 16/2013, Discussion Paper Series in Economics from Norwegian School of Economics, Department of Economics

Abstract: I estimate the effects of public health insurance on consumption smoothing and investigate the extent to which the public insurance interacts with private arrangements of self-insurance. Exploiting a dramatic expansion in health insurance coverage in rural China, I find that the introduction of public health insurance helps households completely insure against severe health shocks. The health insurance also reduces the magnitude of decline during a health shock in investments in children's education, agricultural activities and durable goods. The evidence suggests that the benefit of social insurance for low-income households could also come from reducing the use of costly smoothing mechanisms.

Keywords: Public health insurance; Rural China (search for similar items in EconPapers)
JEL-codes: D10 I10 O10 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2013-10-24
New Economics Papers: this item is included in nep-agr, nep-dev, nep-hea, nep-ias, nep-pbe and nep-tra
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Citations: View citations in EconPapers (1)

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