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Effects of health insurance on labour supply: Evidence from the health care fund for the poor in Viet Nam

Author

Listed:
  • Le, Nga T.Q.

    (UNU-MERIT, Maastricht University)

  • Groot, Wim

    (TIER and CAPHRI School for Public Health and Primary Care, Maastricht University,)

  • Tomini, Sonila

    (UNU-MERIT, Maastricht University)

  • Tomini, Florian

    (TIER, Maastricht University, and Amsterdam School of Economics, University of Amsterdam,)

Abstract

The expansion of health insurance in emerging countries raises concerns about unintended negative effects of health insurance on labour supply. This paper examines the labour supply effects of the Health Care Fund for the Poor (HCFP) in Vietnam in terms of the monthly number of work hours and the probability of employment. Employing Difference-in- Differences Matching methods on the Vietnam Household Living Standard Survey 2002-2006, we show that HCFP, which aims to provide poor people and disadvantaged minority groups with free health insurance, has a positive labour supply effect in the short run. However, in the longer run, the net effect becomes negative due to the income effect. This is manifested in both average work hours per month and the probability of employment albeit the effect on the latter is statistically insignificant. Interestingly, the finding of the income effect is mainly driven by the non-poor recipients living in rural areas. This raises the question of targeting strategy of the programme to avoid unintended labour supply distortion.

Suggested Citation

  • Le, Nga T.Q. & Groot, Wim & Tomini, Sonila & Tomini, Florian, 2017. "Effects of health insurance on labour supply: Evidence from the health care fund for the poor in Viet Nam," MERIT Working Papers 2017-050, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2017050
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    File URL: https://www.merit.unu.edu/publications/wppdf/2017/wp2017-050.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    health insurance; human resources; labour supply; health care funding; welfare; Vietnam;
    All these keywords.

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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