Health insurance and self-employment transitions in Vietnam

Nga Leopold, Wim Groot, Sonila M. Tomini and Florian Tomini

Journal of Small Business Management, 2021, vol. 59, issue 6, 1279-1300

Abstract: Health insurance can have important effects on self-employment and self-employment transitions. However, there is a literature gap on the relationship between health insurance and self-employment in low- and middle-income countries, especially in the context of the rapid expansion of health insurance in these countries. This article examines this relationship in Vietnam with a focus on a comparison between the voluntary scheme for the informal sector (mostly self-employed workers) and compulsory insurance for the formal sector (mostly wage workers). We employ a Probit model with selection on a panel from the Vietnamese Household Living Standards Surveys 2010–2014 to investigate the association between health insurance and self-employment entry and exit. We show that those with compulsory health insurance in Vietnam, the formal workers, are 10 percentage points less likely to enter self-employment than those having voluntary insurance. Regarding self-employment exit, people with compulsory insurance are more likely to exit self-employment compared with those covered by voluntary insurance. However, the effect size is relatively small.

Date: 2021
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DOI: 10.1080/00472778.2020.1786335

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