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The New Cooperative Medical Scheme and Self-Employment in Rural China

Baozhong Su (), Gatwaza Hategekimana Thierry (), Qihui Chen () and Qiran Zhao ()
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Baozhong Su: College of Economics and Management, China Agricultural University, Beijing 100083, China
Gatwaza Hategekimana Thierry: College of Economics and Management, China Agricultural University, Beijing 100083, China

Sustainability, 2017, vol. 9, issue 2, 1-10

Abstract: Using panel data from the China Health and Nutrition Survey, this study estimates the effect of the New Cooperative Medical Scheme (NCMS) on self-employment in rural China, based on a difference-in-differences method (combined with propensity score matching). Specifically, we compare employment status of the participants and non-participants groups before and after the NCMS was implemented (within the common-support region). We found that the NCMS increased a rural resident’s likelihood of shifting from working for others to self-employed by 38 percentage points and that of shifting from temporarily employed to self-employed by 23 percentage points. These results suggest that apart from reducing uncertainty in future spending for the insured due to catastrophic illness, universal health insurance could also have a positive effect on the labor market, namely, that of increasing rates of self-employment.

Keywords: universal health insurance; self-employment; difference-in-differences; propensity score matching; rural China (search for similar items in EconPapers)
JEL-codes: Q Q0 Q2 Q3 Q5 Q56 O13 (search for similar items in EconPapers)
Date: 2017
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