How Does a Health Insurance Program Covering 500 Million Poor Impact Credit Market Outcomes?

Prasanna Tantri ()
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Prasanna Tantri: Centre for Analytical Finance, Indian School of Business, Gachibowli, Hyderabad 500032, India

Management Science, 2025, vol. 71, issue 6, 4533-4551

Abstract: I study the impact of the world’s largest publicly funded health insurance plan for the poor on credit markets. India launched a health insurance plan that covered 500 million beneficiaries. The fact that opposition-ruled states did not implement the program for political reasons allows me to compare border districts of implemented and nonimplemented states within a difference-in-differences framework. I find that loan delinquency reduced significantly in implemented districts. Increased liquidity for loan repayment seems to be the mechanism at work. I rule out the federal-level ruling party’s influence as an explanation.

Keywords: health insurance; household finance; banking; access to finance (search for similar items in EconPapers)
Date: 2025
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