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Does non-employment based health insurance promote entrepreneurship? Evidence from a policy experiment in China

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  • Liu, Lulu
  • Zhang, Yuting

Abstract

Previous researchers have shown that employment-based health insurance lowers job mobility and deters entrepreneurship. The Urban Resident Basic Medical Insurance (URBMI) program, piloted in 2007 in China and fully established in 2009, offers health insurance to about 271 million urban residents without formal employment. Before the implementation of URBMI, most urban residents obtained health insurance through their employers, and therefore a large number of unemployed and self-employed individuals were uninsured. Thus, URBMI creates a new insurance option that does not depend on formal employment and may promote entrepreneurship. We take advantage of this policy change to evaluate the effect of URBMI on self-employment. Using 2000–2011 data from the China Health and Nutrition Survey and a difference-in-differences approach with propensity score weighting, we found that URBMI increased self-employment rate by at least 8.73% for the overall population. The result was mainly driven by the URBMI’s impact on unhealthy workers, individuals with 12 years of schooling or less, and workers above 30 years old.

Suggested Citation

  • Liu, Lulu & Zhang, Yuting, 2018. "Does non-employment based health insurance promote entrepreneurship? Evidence from a policy experiment in China," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 270-283.
  • Handle: RePEc:eee:jcecon:v:46:y:2018:i:1:p:270-283
    DOI: 10.1016/j.jce.2017.04.003
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    Cited by:

    1. Lin Xiu & Morley Gunderson, 2021. "Does an Entrepreneurial Career Pay for Women in China?," British Journal of Industrial Relations, London School of Economics, vol. 59(1), pages 167-190, March.
    2. Wei Si, 2021. "Public health insurance and the labor market: Evidence from China's Urban Resident Basic Medical Insurance," Health Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 403-431, February.
    3. Wei Xiao & Mingqin Wu, 2021. "Life-cycle factors and entrepreneurship: evidence from rural China," Small Business Economics, Springer, vol. 57(4), pages 2017-2040, December.
    4. Fuentes Cordoba, Gabriel, 2019. "Does the recognition of indigenous territories impact household economic situations? Evidence from western Panama," Journal of Comparative Economics, Elsevier, vol. 47(1), pages 225-237.
    5. Zhao, Chunkai & Li, Xing, 2022. "Living under the shadow: Adverse childhood experiences and entrepreneurial behaviors in Chinese adults," Journal of Business Research, Elsevier, vol. 138(C), pages 239-255.
    6. Kautonen, Teemu & Halvorsen, Cal & Minniti, Maria & Kibler, Ewald, 2023. "Transitions to entrepreneurship, self-realization, and prolonged working careers: Insights from the English Longitudinal Study of Ageing," Journal of Business Venturing Insights, Elsevier, vol. 19(C).
    7. Li, Xiaoxue & Tian, Liu, 2020. "The effect of non-employment-based health insurance program on firm's offering of health insurance: Evidence from the social health insurance system in China," Journal of Comparative Economics, Elsevier, vol. 48(4), pages 997-1010.
    8. Su, Yiyi & Song, Jialin & Lu, Ying & Fan, Di & Yang, Miles, 2023. "Economic poverty, common prosperity, and underdog entrepreneurship," Journal of Business Research, Elsevier, vol. 165(C).

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    More about this item

    Keywords

    Health insurance; Job lock; Entrepreneurship; China; Healthcare reform;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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