Working Paper #2017-050
Effects of health insurance on labour supply: Evidence from the health care fund for the poor in Viet Nam
The expansion of health insurance in emerging countries raises concerns
about unintended negative effects of health insurance on labour supply.
This paper examines the labour supply effects of the Health Care Fund
for the Poor (HCFP) in Vietnam in terms of the monthly number of work
hours and the probability of employment. Employing Difference-in-
Differences Matching methods on the Vietnam Household Living Standard
Survey 2002-2006, we show that HCFP, which aims to provide poor people
and disadvantaged minority groups with free health insurance, has a
positive labour supply effect in the short run. However, in the longer
run, the net effect becomes negative due to the income effect. This is
manifested in both average work hours per month and the probability of
employment albeit the effect on the latter is statistically
insignificant. Interestingly, the finding of the income effect is mainly
driven by the non-poor recipients living in rural areas. This raises the
question of targeting strategy of the programme to avoid unintended
labour supply distortion.
- Keywords
-
- health insurance
- labour supply
- Health Care Fund for the poor
- Vietnam
- JEL codes
-
- I13
- J22
Cite this as
APA 7th ed.Leopold, N., Groot, W., Tomini, S., & Tomini, F. (2017). Effects of health insurance on labour supply: Evidence from the health care fund for the poor in Viet Nam (UNU-MERIT Working Paper No. 2017-050). UNU-MERIT. https://unu-merit.nl/publications/working-papers/abstract/?id=7418