Health insurance coverage for low-income households : consumption smoothing and investment
Working paper
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Date
2013-10Metadata
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- Discussion papers (SAM) [657]
Abstract
I estimate the e ects of public health insurance on consumption smoothing and investigate the
extent to which the public insurance interacts with private arrangements of self-insurance. Exploiting
a dramatic expansion in health insurance coverage in rural China, I nd that the introduction of
public health insurance helps households completely insure against severe health shocks. The health
insurance also reduces the magnitude of decline during a health shock in investments in children's
education, agricultural activities and durable goods. The evidence suggests that the bene t of social
insurance for low-income households could also come from reducing the use of costly smoothing
mechanisms.