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Uninsured Health Shocks and Agricultural Productivity among Rural Households: The Mitigating Role of Micro-credit

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  • Rosemary E. Isoto
  • Abdoul G. Sam
  • David S. Kraybill

Abstract

This article investigates how health shocks affect farm productivity in the presence of microcredit. It is expected that microcredit increases agricultural productivity by enhancing allocative and technical efficiency and by overcoming financial constraints that reduce purchase of inputs. However, microcredit will have competing uses in the event of uninsured health shocks to the household. Using an endogenous switching regression model and after accounting for self-selection, the results reveal that microcredit has a significant mitigating effect on farm productivity losses. Thus, microcredit generates a double dividend among smallholders serving as insurance against health shocks in rural areas and improving agricultural productivity.

Suggested Citation

  • Rosemary E. Isoto & Abdoul G. Sam & David S. Kraybill, 2017. "Uninsured Health Shocks and Agricultural Productivity among Rural Households: The Mitigating Role of Micro-credit," Journal of Development Studies, Taylor & Francis Journals, vol. 53(12), pages 2050-2066, December.
    • Handle: RePEc:taf:jdevst:v:53:y:2017:i:12:p:2050-2066
    DOI: 10.1080/00220388.2016.1262027
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    Cited by:

    1. Nguyen, Thanh-Tung & Nguyen, Trung Thanh & Do, Manh Hung & Nguyen, Duy Linh & Grote, Ulrike, 2022. "Shocks, agricultural productivity, and natural resource extraction in rural Southeast Asia," World Development, Elsevier, vol. 159(C).
    2. Gabriel Picone & Assi José Carlos Kimou & Désiré Kanga, 2023. "Medical emergencies and farm productivity in Côte d'Ivoire," Review of Development Economics, Wiley Blackwell, vol. 27(3), pages 1630-1648, August.
    3. Nguyen, Thanh-Tung & Nguyen, Trung Thanh & Grote, Ulrike, 2023. "Credit, shocks and production efficiency of rice farmers in Vietnam," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 780-791.
    4. Ganchimeg Gombodorj & Károly Pető, 2022. "What Type of Households in Mongolia Are Most Hit by COVID-19?," Sustainability, MDPI, vol. 14(6), pages 1-20, March.
    5. Thanh-Tung Nguyen & Trung Thanh Nguyen & Ulrike Grote, 2020. "Weather shocks, credit and production efficiency of rice farmers in Vietnam," TVSEP Working Papers wp-017, Leibniz Universitaet Hannover, Institute for Environmental Economics and World Trade, Project TVSEP.
    6. Alkis Blanz, 2023. "Climate-related Agricultural Productivity Losses through a Poverty Lens," Papers 2310.16490, arXiv.org, revised Oct 2023.

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