Do remittances help smooth consumption during health shocks? Evidence from Jamaica
AbstractSocial networks provide an important means by which individuals and households share risk. One of the mechanisms by which informal risk sharing could be achieved is through remittances. Accordingly, this paper identifies whether and how remittances facilitate consumption smoothing during health shocks in Jamaica. In addition, we identify whether remittances are subject to moral hazard by receivers, how the informal insurance provided by remittances interacts with formal health insurance, and whether there are differential effects by gender of the household head. Overall, we find that remittances offer complete insurance towards decreased consumption during health shocks and that moral hazard is weak. The role of remittances as a social insurance mechanism, however, is only relevant in the absence of private health insurance. Public formal health insurance is found to perform a poor job as a safety net that is completely offset by the social insurance provided by remittances.
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Bibliographic InfoPaper provided by Peruvian Economic Association in its series Working Papers with number 2014-12.
Date of creation: Apr 2014
Date of revision:
Consumption Smoothing; Jamaica; Remittances; Health Shocks;
Other versions of this item:
- Diether Beuermann & Inder J. Ruprah & Ricardo Sierra, 2014. "Do Remittances Help Smooth Consumption During Health Shocks? Evidence From Jamaica," IDB Publications 85493, Inter-American Development Bank.
- F24 - International Economics - - International Factor Movements and International Business - - - Remittances
- I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-04-11 (All new papers)
- NEP-GER-2014-04-11 (German Papers)
- NEP-HEA-2014-04-11 (Health Economics)
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