IDEAS home Printed from https://ideas.repec.org/p/zbw/rwirep/308800.html
   My bibliography  Save this paper

Health insurance premium changes and labor supply: Evidence from a low-income country

Author

Listed:
  • Rukundo, Emmanuel Nshakira
  • Schroeder, Sarah
  • Hisarciklilar, Mehtap
  • McKay, Andrew D.

Abstract

We study the effect of a health insurance premium change on labour supply. Using a matching with difference-in-differences strategy on a pooled nationwide cross-sectional and panel data, we find that both premium waivers and premium increased led to a reduction in labor supply by almost similar margins. We also show that the policy change reduced the probability of wage employment and increased domestic labour supply,, pointing to potential income effects for waivers and potential manipulation effects for premium increases. Our results are robust fo various specifications and raise concerns of the unintended effects of popular but likely inefficient community-based welfare targeting methods.

Suggested Citation

  • Rukundo, Emmanuel Nshakira & Schroeder, Sarah & Hisarciklilar, Mehtap & McKay, Andrew D., 2024. "Health insurance premium changes and labor supply: Evidence from a low-income country," Ruhr Economic Papers 1103, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
  • Handle: RePEc:zbw:rwirep:308800
    DOI: 10.4419/96973281
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/308800/1/1914103084.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.4419/96973281?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Marcelo Bergolo & Guillermo Cruces, 2014. "Work and tax evasion incentive effects of social insurance programs. Evidence from an employment-based benefit extension," CEDLAS, Working Papers 0161, CEDLAS, Universidad Nacional de La Plata.
    2. Markus Frölich & Andreas Landmann, 2018. "Effects of Insurance on Child Labour: Ex-Ante and Ex-Post Behavioural Changes," Journal of Development Studies, Taylor & Francis Journals, vol. 54(6), pages 1002-1018, June.
    3. Laurence Lannes & Bruno Meessen & Agnes Soucat & Paulin Basinga, 2016. "Can performance-based financing help reaching the poor with maternal and child health services? The experience of rural Rwanda," International Journal of Health Planning and Management, Wiley Blackwell, vol. 31(3), pages 309-348, July.
    4. Jonathan Gruber & Aaron Yelowitz, 1999. "Public Health Insurance and Private Savings," Journal of Political Economy, University of Chicago Press, vol. 107(6), pages 1249-1274, December.
    5. Cattaneo, Matias D., 2010. "Efficient semiparametric estimation of multi-valued treatment effects under ignorability," Journal of Econometrics, Elsevier, vol. 155(2), pages 138-154, April.
    6. Richard Blundell & Monica Costa Dias, 2009. "Alternative Approaches to Evaluation in Empirical Microeconomics," Journal of Human Resources, University of Wisconsin Press, vol. 44(3).
    7. Julie Shi, 2016. "Income Responses to Health Insurance Subsidies: Evidence from Massachusetts," American Journal of Health Economics, MIT Press, vol. 2(1), pages 96-124, Winter.
    8. Marc K. Chan & Robert Moffitt, 2018. "Welfare Reform and the Labor Market," Annual Review of Economics, Annual Reviews, vol. 10(1), pages 347-381, August.
    9. Vivi Alatas & Abhijit Banerjee & Rema Hanna & Benjamin A. Olken & Julia Tobias, 2012. "Targeting the Poor: Evidence from a Field Experiment in Indonesia," American Economic Review, American Economic Association, vol. 102(4), pages 1206-1240, June.
    10. Quentin Stoeffler & Francis Fontshi & Aimé Lungela, 2020. "Targeting in Practice: A Review of Existing Mechanisms for Beneficiary Selection in the Democratic Republic of Congo," Journal of International Development, John Wiley & Sons, Ltd., vol. 32(5), pages 824-829, July.
    11. Chunling Lu & Brian Chin & Jiwon Lee Lewandowski & Paulin Basinga & Lisa R Hirschhorn & Kenneth Hill & Megan Murray & Agnes Binagwaho, 2012. "Towards Universal Health Coverage: An Evaluation of Rwanda Mutuelles in Its First Eight Years," PLOS ONE, Public Library of Science, vol. 7(6), pages 1-16, June.
    12. Nazaire Houssou & Collins Asante-Addo & Kwaw S. Andam & Catherine Ragasa, 2019. "How Can African Governments Reach Poor Farmers with Fertiliser Subsidies? Exploring a Targeting Approach in Ghana," Journal of Development Studies, Taylor & Francis Journals, vol. 55(9), pages 1983-2007, September.
    13. Victor Chernozhukov & Iván Fernández-Val & Blaise Melly, 2022. "Fast algorithms for the quantile regression process," Empirical Economics, Springer, vol. 62(1), pages 7-33, January.
    14. Pascale Schnitzer, 2019. "How to Target Households in Adaptive Social Protection Systems? Evidence from Humanitarian and Development Approaches in Niger," Journal of Development Studies, Taylor & Francis Journals, vol. 55(S1), pages 75-90, December.
    15. John Nyman, 2008. "Health insurance theory: the case of the missing welfare gain," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 9(4), pages 369-380, November.
    16. An Ansoms & Esther Marijnen & Giuseppe Cioffo & Jude Murison, 2017. "Statistics versus livelihoods: questioning Rwanda’s pathway out of poverty," Review of African Political Economy, Taylor & Francis Journals, vol. 44(151), pages 47-65, January.
    17. Malin Hasselskog & Isabell Schierenbeck, 2015. "National policy in local practice: the case of Rwanda," Third World Quarterly, Taylor & Francis Journals, vol. 36(5), pages 950-966, May.
    18. Julie Shi, 2016. "Income Responses to Health Insurance Subsidies: Evidence from Massachusetts," American Journal of Health Economics, MIT Press, vol. 2(1), pages 96-124, January.
    19. Matias D. Cattaneo, 2010. "multi-valued treatment effects," The New Palgrave Dictionary of Economics,, Palgrave Macmillan.
    20. Anders Fredriksson & Gustavo Magalhães de Oliveira, 2019. "Impact evaluation using Difference-in-Differences," RAUSP Management Journal, Emerald Group Publishing Limited, vol. 54(4), pages 519-532, October.
    21. Rachel Sabates‐Wheeler & Samantha Yates & Emily Wylde & Justine Gatsinzi, 2015. "Challenges of Measuring Graduation in Rwanda," IDS Bulletin, Blackwell Publishing, vol. 46(2), pages 103-114, March.
    22. Sant’Anna, Pedro H.C. & Zhao, Jun, 2020. "Doubly robust difference-in-differences estimators," Journal of Econometrics, Elsevier, vol. 219(1), pages 101-122.
    23. Emmanuel Saez, 2010. "Do Taxpayers Bunch at Kink Points?," American Economic Journal: Economic Policy, American Economic Association, vol. 2(3), pages 180-212, August.
    24. Holtz-Eakin, Douglas & Penrod, John R. & Rosen, Harvey S., 1996. "Health insurance and the supply of entrepreneurs," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 209-235, October.
    25. Einav, Liran & Finkelstein, Amy & Schrimpf, Paul, 2017. "Bunching at the kink: Implications for spending responses to health insurance contracts," Journal of Public Economics, Elsevier, vol. 146(C), pages 27-40.
    26. Landmann, Andreas & Frölich, Markus, 2015. "Can health-insurance help prevent child labor? An impact evaluation from Pakistan," Journal of Health Economics, Elsevier, vol. 39(C), pages 51-59.
    27. Malin Hasselskog, 2018. "Rwandan “home grown initiatives†: Illustrating inherent contradictions of the democratic developmental state," Development Policy Review, Overseas Development Institute, vol. 36(3), pages 309-328, May.
    28. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    29. Eliana La Ferrara & Annamaria Milazzo, 2017. "Customary Norms, Inheritance, and Human Capital: Evidence from a Reform of the Matrilineal System in Ghana," American Economic Journal: Applied Economics, American Economic Association, vol. 9(4), pages 166-185, October.
    30. Nga Lê & Wim Groot & Sonila M. Tomini & Florian Tomini, 2019. "Effects of health insurance on labour supply: evidence from the health care fund for the poor in Vietnam," Applied Economics, Taylor & Francis Journals, vol. 51(58), pages 6190-6212, December.
    31. Tianyuan Luo & Cesar L. Escalante, 2020. "Public Health Insurance and Farm Labor Supply: Evidence from China's Rural Health Insurance Reform," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 28(6), pages 101-124, November.
    32. Garcia-Mandicó, Sílvia & Reichert, Arndt & Strupat, Christoph, 2021. "The Social Value of Health Insurance: Results from Ghana," Journal of Public Economics, Elsevier, vol. 194(C).
    33. Schneider, Pia, 2005. "Trust in micro-health insurance: an exploratory study in Rwanda," Social Science & Medicine, Elsevier, vol. 61(7), pages 1430-1438, October.
    34. Andinet Woldemichael & Daniel Gurara & Abebe Shimeles, 2019. "The Impact of Community Based Health Insurance Schemes on Out-of-Pocket Healthcare Spending: Evidence from Rwanda," IMF Working Papers 2019/038, International Monetary Fund.
    35. Francois Pathé Diop & Jean Damascene Butera, 2005. "Community-Based Health Insurance in Rwanda," World Bank Publications - Reports 9650, The World Bank Group.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Susan Athey & Guido W. Imbens, 2017. "The State of Applied Econometrics: Causality and Policy Evaluation," Journal of Economic Perspectives, American Economic Association, vol. 31(2), pages 3-32, Spring.
    2. Xiangou Deng & Zhaohui Li & Michael J. Seiler & Hua Sun, 2024. "Market Strength and Brokerage Choice in Residential Housing," The Journal of Real Estate Finance and Economics, Springer, vol. 69(4), pages 741-777, November.
    3. Hartley, Robert Paul & Lamarche, Carlos, 2018. "Behavioral responses and welfare reform: Evidence from a randomized experiment," Labour Economics, Elsevier, vol. 54(C), pages 135-151.
    4. Tohari, Achmad & Parsons, Christopher & Rammohan, Anu, 2019. "Targeting poverty under complementarities: Evidence from Indonesia's unified targeting system," Journal of Development Economics, Elsevier, vol. 140(C), pages 127-144.
    5. Heim, Bradley T. & Hunter, Gillian & Isen, Adam & Lurie, Ithai Z. & Ramnath, Shanthi P., 2021. "Income Responses to the Affordable Care Act: Evidence from a Premium Tax Credit Notch," Journal of Health Economics, Elsevier, vol. 76(C).
    6. Callaway, Brantly & Karami, Sonia, 2023. "Treatment effects in interactive fixed effects models with a small number of time periods," Journal of Econometrics, Elsevier, vol. 233(1), pages 184-208.
    7. Brunello, Giorgio & Rocco, Lorenzo, 2015. "The Labour Market Effects of Academic and Vocational Education over the Life Cycle: Evidence from Two British Cohorts," IZA Discussion Papers 9275, Institute of Labor Economics (IZA).
    8. Lars Thiel, 2015. "Leave the Drama on the Stage: The Effect of Cultural Participation on Health," SOEPpapers on Multidisciplinary Panel Data Research 767, DIW Berlin, The German Socio-Economic Panel (SOEP).
    9. Christoph Strupat, 2022. "Social Protection and Social Cohesion in Times of the COVID-19 Pandemic: Evidence from Kenya," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(3), pages 1320-1357, June.
    10. Lizhong Peng, 2017. "How Does Medicaid Expansion Affect Premiums in the Health Insurance Marketplaces? New Evidence from Late Adoption in Pennsylvania and Indiana," American Journal of Health Economics, MIT Press, vol. 3(4), pages 550-576, Fall.
    11. Schnitzer,Pascale & Stoeffler,Quentin, 2021. "Targeting for Social Safety Nets : Evidence from Nine Programs in the Sahel," Policy Research Working Paper Series 9816, The World Bank.
    12. Ndhlovu, Obrian & Muchapondwa, Edwin, 2021. "The Impact of Farmer Input Support Programme Reform on Crop Diversification and Rotation in Zambia," EfD Discussion Paper 21-10, Environment for Development, University of Gothenburg.
    13. Vincent Dekker & Karsten Schweikert, 2021. "A Comparison of Different Data-driven Procedures to Determine the Bunching Window," Public Finance Review, , vol. 49(2), pages 262-293, March.
    14. Sant’Anna, Pedro H.C. & Zhao, Jun, 2020. "Doubly robust difference-in-differences estimators," Journal of Econometrics, Elsevier, vol. 219(1), pages 101-122.
    15. Stojčić, Nebojša, 2021. "Social and private outcomes of green innovation incentives in European advancing economies," Technovation, Elsevier, vol. 104(C).
    16. Ay, Jean-Sauveur & Le Gallo, Julie, 2021. "The Signaling Values of Nested Wine Names," Working Papers 321851, American Association of Wine Economists.
    17. Katie Meara & Francesco Pastore & Allan Webster, 2020. "The gender pay gap in the USA: a matching study," Journal of Population Economics, Springer;European Society for Population Economics, vol. 33(1), pages 271-305, January.
    18. Estefanía Galván, 2022. "Gender Identity and Quality of Employment," Economica, London School of Economics and Political Science, vol. 89(354), pages 409-436, April.
    19. Shaibu Baanni Azumah & Abraham Zakaria & Rosaine N. Yegbemey & Philips A. Apalogta & Vishal Dagar & Abass Mahama, 2022. "Climate Smart Production, Gross Income, and Downstream Risk Characterization of Rice Farmers in Ghana," Journal of Agricultural Studies, Macrothink Institute, vol. 10(2), pages 13-35, June.
    20. Hong, Yan-Zhen & Chang, Hung-Hao & Dai, Yong-Wu, 2018. "Is deregulation of forest land use rights transactions associated with economic well-being and labor allocation of farm households? Empirical evidence in China," Land Use Policy, Elsevier, vol. 75(C), pages 694-701.

    More about this item

    Keywords

    Health insurance; premium changes; labor supply; Rwanda;
    All these keywords.

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:rwirep:308800. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/rwiesde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.