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Income shock and Women’s Health Spending:Evidence from India

Author

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  • Shubhangi Agrawal

    (University of Edinburgh)

  • Sambit Bhattacharyya

    (University of Sussex Business School)

  • Chirantan Chatterjee

    (University of Sussex Business School)

  • Somdeep Chatterjee

    (Indian Institute of Management Calcutta)

Abstract

Conventional wisdom states that healthcare is a luxury good. Spending on healthcare is expected torise disproportionately with rising income. However, India appears to be a clear outlier with its aggregate national healthcare spending falling during rapid economic expansion. We explore this curious anomaly by estimating the causal effect of income on healthcare expenditure using large longitudinal household and patient level administrative datasets covering the period 2016-2020. An unanticipated shock in the form of a reduction in mandated employees’ provident fund contribution for women is used to identify the causal effect in female led households. We find that an unanticipated income shock is associated with a decrease in overall spending on healthcare in female led households even after controlling for improved health outcomes for women, health-status, healthcare uti-lization at the intensive margin (i.e., hospital visits to seek treatment). Our results suggest that healthcare spending by females in India and the global South is guided by dynamic preferences and social norms.

Suggested Citation

  • Shubhangi Agrawal & Sambit Bhattacharyya & Chirantan Chatterjee & Somdeep Chatterjee, 2024. "Income shock and Women’s Health Spending:Evidence from India," Working Paper Series 1324, Department of Economics, University of Sussex Business School.
    • Handle: RePEc:sus:susewp:1324
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    Income; Health Spending;

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