Does health insurance mitigate the economic impact of negative health outcomes? Evidence from Ghana’s National Health Insurance Scheme

Jacob Novignon (), Eric Arthur, Kwasi Gyabaa Tabiri, Yaw Boateng Atakorah and Justice Nonvignon
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Jacob Novignon: Kwame Nkrumah University of Science and Technology
Eric Arthur: Kwame Nkrumah University of Science and Technology
Kwasi Gyabaa Tabiri: Kwame Nkrumah University of Science and Technology
Yaw Boateng Atakorah: Kwame Nkrumah University of Science and Technology
Justice Nonvignon: University of Ghana

Journal of Social and Economic Development, 2024, vol. 26, issue 2, No 11, 582-602

Abstract: Abstract In many developing countries, financial risk protection for health is under-developed and negative health outcomes can be impoverishing. In this study, we sought to investigate the impact of negative health outcomes on household welfare and the role of public health insurance in mitigating this impact. We used data from the seventh round of the Ghana Living Standards Survey (GLSS). To address the potentially non-random nature of the health insurance scheme, the Lewbel instrumental variable estimation technique was used. The results suggest that more days of illness lead to fewer hours of labour supply and this result was statistically significant across all specifications. We found evidence of a heterogeneous impact of negative health outcomes through health insurance coverage on hours of labour supply for the full sample. We also find that for rural dwellers and informal sector workers, days of illness reduced labour supply, while the impact was relatively less with health insurance coverage. The findings call for policies that focus on reforming the NHIS to ensure effectiveness and achieve its primary objectives of removing financial barriers to health care in Ghana.

Keywords: Health insurance; Health outcomes; Labour supply; Ghana (search for similar items in EconPapers)
JEL-codes: D12 I13 I3 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s40847-023-00287-4

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