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Health shocks, village elections, and household income: Evidence from rural China

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Listed:
  • Zhang, Jing
  • Gan, Li
  • Xu, Lixin Colin
  • Yao, Yang

Abstract

Using a sample of 1185 households in 48 Chinese villages for the period 1987–2002, we study the effects of major health shocks on household income and the role played by village elections in mitigating these effects. Major health shocks are defined by abnormal increases in a household's medical expenditure. Our results show that a major health shock reduces households' net income significantly and that village elections alleviate such adverse impacts by almost half. The main mechanism behind this effect is increased coverage of health care insurance, which helps households smooth their consumption when major health shocks happen.

Suggested Citation

  • Zhang, Jing & Gan, Li & Xu, Lixin Colin & Yao, Yang, 2014. "Health shocks, village elections, and household income: Evidence from rural China," China Economic Review, Elsevier, vol. 30(C), pages 155-168.
  • Handle: RePEc:eee:chieco:v:30:y:2014:i:c:p:155-168
    DOI: 10.1016/j.chieco.2014.06.006
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    More about this item

    Keywords

    Health shocks; Village governance; Farmers' income;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development

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