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Health shocks, household consumption, and child nutrition

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Author Info

  • Marcos Vera-Hernández

    ()
    (Institute for Fiscal Studies)

  • Aida Galiano Martínez

    (Universidad de Zaragoza)

Abstract

This paper investigates the effect of health shocks on household consumption and child nutrition. Using longitudinal data from rural Colombia we find that several items of household consumption, including medical expenditure, food consumption, and total consumption, increase following a recent illness event of an adult usually active in the labour market. In contrast to this, we find that girls¿ weight is negatively affected, as a consequence of the same illness event. The results on nutrition present an interesting gender bias, since we do not find any evidence that boys¿ nutritional status deteriorates. Our conclusion is that households make difficult intrahousehold choices when an illness shock hit them. The results have implications for the literature on testing for full insurance because it usually relies on household consumption net of medical expenditures as a measure of welfare. This fact shows that this literature might has underestimated the effects of health shocks on welfare. Este artículo investiga los efectos de los shock de salud sobre el consumo de los hogares y la nutrición infantil. A partir de una base de datos longitudinal que corresponde a datos del área rural de Colombia encontramos que varios elementos del consumo de los hogares, incluidos gastos médicos, consumo de alimentos y consumo total del hogar, aumentan después de que una reciente enfermedad afecte a un adulto del hogar activo en el mercado de trabajo. En contraposición a este resultado, encontramos que la nutrición de los niños se ve negativamente afectada. En concreto el peso de las niñas se reduce tras este shock de salud. Este resultado sobre nutrición presenta un interesante sesgo de género, ya que no encontramos evidencia de un deterioro nutricional en los niños. Nuestra conclusión es que los hogares tienen difícil elecciones dentro de los hogares cuando un shock de salud les sacude. Este resultado tiene implicaciones para la literatura que prueba la cobertura total de los hogares ya que esta atiende únicamente al consumo de los hogares, neto de los gastos médicos, como medida de bienestar. Este hecho muestra que esta literatura podría estar subestimando los efectos de los shock de salud sobre el bienestar de los hogares.

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File URL: http://www.ivie.es/downloads/docs/wpasec/wpasec-2008-14.pdf
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Bibliographic Info

Paper provided by Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie) in its series Working Papers. Serie EC with number 2008-14.

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Length: 36 pages
Date of creation: Dec 2008
Date of revision:
Publication status: Published by Ivie
Handle: RePEc:ivi:wpasec:2008-14

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Related research

Keywords: Riesgo compartido; Nutrición infantil; Consumo del hogar; Shock de salud. Risk sharing; Child nutrition; Household Consumption; Intrahousehold; Health Shocks.;

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References

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  1. Morduch, Jonathan, 1999. "Between the State and the Market: Can Informal Insurance Patch the Safety Net?," World Bank Research Observer, World Bank Group, vol. 14(2), pages 187-207, August.
  2. Jere R. Behrman & Anil B. Deolalikar, 1990. "The Intrahousehold Demand for Nutrients in Rural South India: Individual Estimates, Fixed Effects, and Permanent Income," Journal of Human Resources, University of Wisconsin Press, vol. 25(4), pages 665-696.
  3. Schultz, T-P, 1996. "Wage and Labor Supply effects of Illness in Cote d'Ivoire and Ghana : Instrumental Variable Estimates for Days Disabled," Papers 757, Yale - Economic Growth Center.
  4. Paxson, Christina H, 1992. "Using Weather Variability to Estimate the Response of Savings to Transitory Income in Thailand," American Economic Review, American Economic Association, vol. 82(1), pages 15-33, March.
  5. Jonathan Morduch, 1995. "Income Smoothing and Consumption Smoothing," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 103-114, Summer.
  6. Pepper, John V., 2002. "Robust inferences from random clustered samples: an application using data from the panel study of income dynamics," Economics Letters, Elsevier, vol. 75(3), pages 341-345, May.
  7. Morduch, Jonathan, 1994. "Poverty and Vulnerability," American Economic Review, American Economic Association, vol. 84(2), pages 221-25, May.
  8. Stefan Dercon & Pramila Krishnan, 2000. "In Sickness and in Health: Risk Sharing within Households in Rural Ethiopia," Journal of Political Economy, University of Chicago Press, vol. 108(4), pages 688-727, August.
  9. John Maluccio & John Hoddinott & Jere R. Behrman & Reynaldo Martorell & Agnes R. Quisumbing & Aryeh D. Stein, 2006. "The Impact of Nutrition during Early Childhood on Education among Guatemalan Adults," Middlebury College Working Paper Series 0614, Middlebury College, Department of Economics.
  10. John Bound, 1991. "Self-Reported Versus Objective Measures of Health in Retirement Models," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 106-138.
  11. Strauss, John & Thomas, Duncan, 1995. "Human resources: Empirical modeling of household and family decisions," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 34, pages 1883-2023 Elsevier.
  12. Strauss, J. & Thomas, D., 1995. "Health, Nutrition and Economic development," Papers 95-23, RAND - Labor and Population Program.
  13. Beegle, Kathleen & Dehejia, Rajeev H. & Gatti, Roberta, 2006. "Child labor and agricultural shocks," Journal of Development Economics, Elsevier, vol. 81(1), pages 80-96, October.
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Citations

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Cited by:
  1. Juan Antonio Máñez Castillejo & Amparo Sanchis Llopis & Juan A. Sanchis Llopis & María Engracia Rochina Barrachina, 2009. "Do process innovations boost SMEs productivity growth?," Working Papers. Serie EC 2009-12, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  2. Pilar Beneito López & Amparo Sanchis Llopis & María Engracia Rochina Barrachina, 2009. "The role of learning in innovation: in-house versus externally contracted R&D experience," Working Papers. Serie EC 2009-11, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).

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