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Insuring against health shocks: Health insurance and household choices

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  • Liu, Kai

Abstract

This paper provides empirical evidence on the role of public health insurance in mitigating adverse outcomes associated with health shocks. Exploiting the rollout of a universal health insurance program in rural China, I find that total household income and consumption are fully insured against health shocks even without access to health insurance. Household labor supply is an important insurance mechanism against health shocks. Access to health insurance helps households to maintain investment in children's human capital during negative health shocks, which suggests that one benefit of health insurance could arise from reducing the use of costly smoothing mechanisms.

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  • Liu, Kai, 2016. "Insuring against health shocks: Health insurance and household choices," Journal of Health Economics, Elsevier, vol. 46(C), pages 16-32.
    • Handle: RePEc:eee:jhecon:v:46:y:2016:i:c:p:16-32
    DOI: 10.1016/j.jhealeco.2016.01.002
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    More about this item

    Keywords

    Health insurance; Health shocks; China;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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