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Wealthier But Not Much Healthier: Effects of a Health Insurance Program for the Poor in Mexico

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  • Rodrigo Barros

    ()
    (Stanford University)

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    Abstract

    In 2002 the Mexican government began a very large expansion of government-funded healthcare for the poor - specifically, people not employed in the formal sector. The program, Seguro Popular (SP), was rolled out sequentially across different areas in Mexico. This paper uses the variation in program intensity over time and space induced by the roll-out, comparing people in the informal sector (eligible for SP) to those in the formal sector (ineligible for SP), to measure the program's impacts. I find that the program substantially reduced out-of-pocket health expenditures of beneficiaries and caused them to shift from private to public providers. However, the program had a negligible effect on the health of beneficiaries, perhaps because the quality of care was low. The program also had no effect on labor force participation or earnings. One worry among policymakers is that Seguro Popular might induce workers to shift into the informal sector. I find no evidence of this effect. The low quality of care provided under SP, while reducing the welfare gains to beneficiaries, may have prevented the unintended consequence of encouraging movement into the informal sector.

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    File URL: http://www-siepr.stanford.edu/repec/sip/09-002.pdf
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    Bibliographic Info

    Paper provided by Stanford Institute for Economic Policy Research in its series Discussion Papers with number 09-002.

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    Date of creation: Nov 2008
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    Handle: RePEc:sip:dpaper:09-002

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    Related research

    Keywords: Mexico; healthcare; Seguro Popular; welfare;

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    References

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    1. Chetty, Raj & Looney, Adam, 2006. "Consumption smoothing and the welfare consequences of social insurance in developing economies," Journal of Public Economics, Elsevier, vol. 90(12), pages 2351-2356, December.
    2. Currie, Janet & Gruber, Jonathan, 1996. "Health Insurance Eligibility, Utilization of Medical Care, and Child Health," The Quarterly Journal of Economics, MIT Press, vol. 111(2), pages 431-66, May.
    3. Anne Case & Alicia Menendez, 2007. "Sex Differences in Obesity Rates in Poor Countries: Evidence from South Africa," Working Papers 1004, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
    4. Besley, Timothy & Coate, Stephen, 1991. "Public Provision of Private Goods and the Redistribution of Income," American Economic Review, American Economic Association, vol. 81(4), pages 979-84, September.
    5. Gary King & Emmanuela Gakidou & Nirmala Ravishankar & Ryan T. Moore & Jason Lakin & Manett Vargas & Martha Mar�a Téllez-Rojo & Juan Eugenio Hernández �vila & Mauricio Hernández �vila & Hécto, 2007. "A “politically robust” experimental design for public policy evaluation, with application to the Mexican Universal Health Insurance program," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 26(3), pages 479-506.
    6. Paul Gertler & Jonathan Gruber, 1997. "Insuring Consumption Against Illness," NBER Working Papers 6035, National Bureau of Economic Research, Inc.
    7. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
    8. Alberto Abadie & Guido W. Imbens, 2002. "Simple and Bias-Corrected Matching Estimators for Average Treatment Effects," NBER Technical Working Papers 0283, National Bureau of Economic Research, Inc.
    9. Mariano Bosch & William Maloney, 2006. "Gross worker flows in the presence of informal labor markets. The Mexican experience 1987-2002," LSE Research Online Documents on Economics 19798, London School of Economics and Political Science, LSE Library.
    10. Currie, Janet & Gruber, Jonathan, 1996. "Saving Babies: The Efficacy and Cost of Recent Changes in the Medicaid Eligibility of Pregnant Women," Journal of Political Economy, University of Chicago Press, vol. 104(6), pages 1263-96, December.
    11. Janet Currie & Jonathan Gruber, 1997. "The Technology of Birth: Health Insurance, Medical Interventions, and Infant Health," NBER Working Papers 5985, National Bureau of Economic Research, Inc.
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    Cited by:
    1. Angel-Urdinola, Diego F. & Haimovich, Francisco & Robayo, Monica, 2009. "Is Social Assistance Contributing to Higher Informality in Turkey?," MPRA Paper 27675, University Library of Munich, Germany.
    2. Spenkuch, Jörg L., 2012. "Moral hazard and selection among the poor: Evidence from a randomized experiment," Journal of Health Economics, Elsevier, vol. 31(1), pages 72-85.
    3. Jorge Alonso-Ortiz & Julio Leal, 2013. "The elasticity of Informality to Taxes and tranfers," Working Papers 1308, Centro de Investigacion Economica, ITAM.
    4. Spenkch, Jörg L., 2011. "Adverse selection and moral hazard among the poor: evidence from a randomized experiment," MPRA Paper 31443, University Library of Munich, Germany.
    5. Alonso-Ortiz, Jorge & Leal Ordonez, Julio, 2013. "The Elasticity of Informality to Taxes and Transfers," MPRA Paper 49568, University Library of Munich, Germany.

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