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Heterogeneity of the effects of health insurance on household savings: Evidence from rural China

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  • Diana Cheung

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

  • Ysaline Padieu

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

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    Abstract

    This paper estimates the impact of the New Cooperative Medical Scheme (NCMS) on household saving across income quartiles in rural China. We use data from the China Health and Nutrition Survey for the 2006 wave and we run an ordinary least squares regression. We control for the endogeneity of NCMS participation by using an instrumental variable strategy. We find evidence that NCMS has a negative impact on savings of lower-middle-income participants, while it does not affect the poorest households. The negative effect of NCMS on savings of middle-income participants holds when we use propensity score matching estimations as a robustness check.

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    Bibliographic Info

    Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00848061.

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    Date of creation: Jul 2013
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    Handle: RePEc:hal:cesptp:halshs-00848061

    Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00848061
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    Related research

    Keywords: Rural China; New Cooperative Medical Scheme; health insurance; Chinese savings and consumption; propensity score matching;

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    1. Jonathan Gruber & Aaron S. Yelowitz, 1998. "Public Health Insurance and Private Savings," JCPR Working Papers 42, Northwestern University/University of Chicago Joint Center for Poverty Research.
    2. Zhang, Xiaobo & Kanbur, Ravi, 2005. "Spatial inequality in education and health care in China," China Economic Review, Elsevier, vol. 16(2), pages 189-204.
    3. Marcos D. Chamon & Eswar S. Prasad, 2010. "Why Are Saving Rates of Urban Households in China Rising?," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(1), pages 93-130, January.
    4. Dong, Keyong, 2009. "Medical insurance system evolution in China," China Economic Review, Elsevier, vol. 20(4), pages 591-597, December.
    5. Huber, Martin & Lechner, Michael & Wunsch, Conny, 2013. "The performance of estimators based on the propensity score," Journal of Econometrics, Elsevier, vol. 175(1), pages 1-21.
    6. Aart Kraay, 2000. "Household Saving in China," World Bank Economic Review, World Bank Group, vol. 14(3), pages 545-570, September.
    7. Alex Maynard & Jiaping Qiu, 2009. "Public insurance and private savings: who is affected and by how much?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(2), pages 282-308, 03.
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