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Informality and the expansion of social protection programs: Evidence from Mexico

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  • Azuara, Oliver
  • Marinescu, Ioana

Abstract

Many countries are moving from employer-based to universal health coverage, which can generate crowd out. In Mexico, Seguro Popular provides public health coverage to the uninsured. Using the gradual roll-out of the system at the municipality level, we estimate that Seguro Popular had no effect on informality in the overall population. Informality did increase by 1.7% for less educated workers, but the wage gains for workers who switch between the formal and the informal sector were not significantly affected. This suggests that marginal workers do not choose between formal and informal jobs on the basis of health insurance coverage.

Suggested Citation

  • Azuara, Oliver & Marinescu, Ioana, 2013. "Informality and the expansion of social protection programs: Evidence from Mexico," Journal of Health Economics, Elsevier, vol. 32(5), pages 938-950.
    • Handle: RePEc:eee:jhecon:v:32:y:2013:i:5:p:938-950
    DOI: 10.1016/j.jhealeco.2013.07.004
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    More about this item

    Keywords

    Health insurance; Crowd-out; Development; Job mobility; Wages;
    All these keywords.

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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