Economics at your fingertips  

Health insurance and consumption: Evidence from China’s New Cooperative Medical Scheme

Chong-En Bai and Binzhen Wu ()

Journal of Comparative Economics, 2014, vol. 42, issue 2, 450-469

Abstract: We exploit a quasi-natural experiment arising from the introduction of a health insurance program in rural China to examine how the insurance coverage affects household consumption. Results show that, on average, the health insurance coverage increases nonmedical-related consumption by more than 5%. This insurance effect is observed even in households with no out-of-pocket medical spending. In addition, the insurance effect is stronger in households with worse self-reported health status. These results are consistent with the precautionary savings argument. The insurance effect also varies by household experience with the program. In particular, the effect is significant only in villages where some households have actually obtained reimbursement from the insurance program. The program within these villages stimulates less consumption among new participants than among households that have participated in the program for more than a year.

Keywords: Precautionary savings; Health insurance; Consumption; New Cooperative Medical Scheme; Chinese savings (search for similar items in EconPapers)
JEL-codes: D12 D91 E21 I18 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.jce.2013.07.005

Access Statistics for this article

Journal of Comparative Economics is currently edited by D. Berkowitz and G. Roland

More articles in Journal of Comparative Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2021-08-31
Handle: RePEc:eee:jcecon:v:42:y:2014:i:2:p:450-469