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Effects of health insurance on labour supply: Evidence from the health care fund for the poor in Viet Nam

Nga T.Q. Le (), Wim Groot (), Sonila Tomini () and Florian Tomini ()
Additional contact information
Nga T.Q. Le: UNU-MERIT, Maastricht University
Wim Groot: TIER and CAPHRI School for Public Health and Primary Care, Maastricht University,
Sonila Tomini: UNU-MERIT, Maastricht University
Florian Tomini: TIER, Maastricht University, and Amsterdam School of Economics, University of Amsterdam,

No 2017-050, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: The expansion of health insurance in emerging countries raises concerns about unintended negative effects of health insurance on labour supply. This paper examines the labour supply effects of the Health Care Fund for the Poor (HCFP) in Vietnam in terms of the monthly number of work hours and the probability of employment. Employing Difference-in- Differences Matching methods on the Vietnam Household Living Standard Survey 2002-2006, we show that HCFP, which aims to provide poor people and disadvantaged minority groups with free health insurance, has a positive labour supply effect in the short run. However, in the longer run, the net effect becomes negative due to the income effect. This is manifested in both average work hours per month and the probability of employment albeit the effect on the latter is statistically insignificant. Interestingly, the finding of the income effect is mainly driven by the non-poor recipients living in rural areas. This raises the question of targeting strategy of the programme to avoid unintended labour supply distortion.

Keywords: health insurance; human resources; labour supply; health care funding; welfare; Vietnam (search for similar items in EconPapers)
JEL-codes: I13 J22 O15 (search for similar items in EconPapers)
Date: 2017-12-04
New Economics Papers: this item is included in nep-dev, nep-hea, nep-ias, nep-sea and nep-tra
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