Income shock and Women’s Health Spending:Evidence from India*

Shubhangi Agrawal, Sambit Bhattacharyya, Chirantan Chatterjee and Somdeep Chatterjee
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Shubhangi Agrawal: University of Edinburgh
Chirantan Chatterjee: University of Sussex Business School
Somdeep Chatterjee: Indian Institute of Management Calcutta

Working Paper Series from Department of Economics, University of Sussex Business School

Abstract: Conventional wisdom states that healthcare is a luxury good. Spending on healthcare is expected torise disproportionately with rising income. However, India appears to be a clear outlier with its aggregate national healthcare spending falling during rapid economic expansion. We explore this curious anomaly by estimating the causal effect of income on healthcare expenditure using large longitudinal household and patient level administrative datasets covering the period 2016-2020. An unanticipated shock in the form of a reduction in mandated employees’ provident fund contribution for women is used to identify the causal effect in female led households. We find that an unanticipated income shock is associated with a decrease in overall spending on healthcare in female led households even after controlling for improved health outcomes for women, health-status, healthcare uti-lization at the intensive margin (i.e., hospital visits to seek treatment). Our results suggest that healthcare spending by females in India and the global South is guided by dynamic preferences and social norms.

Keywords: Income; Health Spending (search for similar items in EconPapers)
Date: 2024-10
New Economics Papers: this item is included in nep-dev and nep-hea
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