UNU-MERIT Working Papers Series
Health insurance and self-employment transitions in Vietnam
Nga Leopold, Wim Groot, Sonila Tomini & Florian Tomini #2019-008Health insurance can have important effects on self-employment and self-
employment transitions. However, there is a literature gap on the
relationship between health insurance and self-employment in low and
middle income countries, especially in the context of rapid expansion of
health insurance in these countries. This paper examines this
relationship in Vietnam with a focus on the comparison between the
voluntary scheme for the informal sector (mostly self-employed workers)
and the compulsory insurance for the formal sector (mostly wage
workers). We employ a Probit model with selection on a panel from the
Vietnamese Household Living Standards Surveys 2010-2014 to investigate
the association between health insurance and self-employment entry and
exit. We show that those with compulsory health insurance in Vietnam,
the formal workers, are 10 percentage points less likely to enter
self-employment compared to those having voluntary insurance. Regarding
self-employment exit, people with compulsory insurance are more likely
to exit self-employment compared to those covered by voluntary
insurance. However, the effect size is relatively small.
JEL Classification: I13, J22
Keywords: health insurance, self-employment, Vietnam, self-employment
entry, self-employment exit
Download the working paper (PDF)
