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Individual health perspective, income protection insurance coverage and human capital growth

Author

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  • Weiguang Liu

    (Nagoya University)

Abstract

Health insurance in poor developing countries has long been a hot topic. Income protection insurance (IPI) is a specific form of health insurance. In an overlapping generation economy without long time saving, we compared the attitudes of individuals with different health perspective towards IPI and analyzed the impact of IPI on human capital growth. We have the following findings: (i) from the healthiest to the most unhealthy, we can divide all individuals into 4 types: the healthiest, the second healthiest, the third healthiest, and the most unhealthy, each with different attitude towards IPI and IPI will influence their human capital accumulation differently; (ii) the healthiest individuals will choose no IPI, and IPI will not influence their human capital growth; (iii) the second healthiest individuals will choose partial IPI, and IPI will decrease their human capital accumulation; (iv) the third healthiest individuals will choose full IPI and IPI will decrease their human capital accumulation, and people will choose full life insurance when the net return from education is less than zero; (v) the individuals with the worst health will choose full IPI and IPI will increase their human capital accumulation; (vi) the impact of IPI on the human capital growth of the whole economy depends on health distribution, if more individuals have extreme health, especially extreme bad health, IPI tend to enhance human capital growth of the whole economy.

Suggested Citation

  • Weiguang Liu, 2020. "Individual health perspective, income protection insurance coverage and human capital growth," Economics Bulletin, AccessEcon, vol. 40(1), pages 177-187.
    • Handle: RePEc:ebl:ecbull:eb-19-00823
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    References listed on IDEAS

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    Cited by:

    1. Weiguang Liu, 2021. "Human capital accumulation, income protection insurance and poverty reduction in the least developed countries," Australian Economic Papers, Wiley Blackwell, vol. 60(2), pages 361-372, June.

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    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I2 - Health, Education, and Welfare - - Education

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