Effect of a health shock on working hours and health care usage: the role of financial inclusion in Ghana

Paul Owusu Takyi () and Roberto Leon-Gonzalez
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Paul Owusu Takyi: Kwame Nkrumah University of Science and Technology

International Journal of Economic Policy Studies, 2022, vol. 16, issue 1, No 6, 113-134

Abstract: Abstract This study explores the role of financial inclusion in the mitigation of the effects of a health shock at the household level. To that end, we examine empirically the effect of financial inclusion on household working hours and health care utilization, using round six of the Ghana Living Standard Survey data. We find that a health shock does decrease household working hours and increase the likelihood of health care utilization. This suggests that households in Ghana are not able to fully insure themselves against a health shock. However, we find that, faced with a health shock, households who are financially excluded see their working hours reduce more than those who enjoy full financial inclusion. In addition, financial inclusion increases the likelihood of health care utilization when households experience a health shock. We find evidence that loan acquisition (borrowing) is one of the main mechanisms by which households can insure themselves against a health shock. Generally, our findings support the financial inclusion agenda of policymakers in Ghana and many other countries. Thus, efforts to ensure full financial inclusion will increase the probability of households using the financial sector as a means of insulating themselves against the effects of health shocks.

Keywords: Health shock; Financial inclusion; Working hours; Health care utilization (search for similar items in EconPapers)
JEL-codes: G21 I10 J22 O12 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s42495-021-00071-4

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