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Crowding out of Solidarity? – Public Health Insurance versus Informal Transfer Networks in Ghana

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  • Klohn, Florian
  • Strupat, Christoph

Abstract

This paper delivers empirical evidence on how informal transfers are affected by a formal and country-wide health insurance scheme. Using the fifth wave of the Ghanaian Living Standard Household Survey, we investigate the extent to which the exogenous implementation of the National Health Insurance Scheme affects the probability of making or receiving informal transfers and their monetary equivalents. Our findings suggest that there is a significant crowding out of informal transfers. Members of weak transfer networks and individuals that run an enterprise are inclined to reduce their amount of remittances. We conclude that the provision of formal health insurance can reduce covariate risk in weak transfer networks and support business owners that are confronted by strong sharing obligations.

Suggested Citation

  • Klohn, Florian & Strupat, Christoph, 2013. "Crowding out of Solidarity? – Public Health Insurance versus Informal Transfer Networks in Ghana," Ruhr Economic Papers 432, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:432
    DOI: 10.4419/86788488
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    References listed on IDEAS

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    Cited by:

    1. Lin, Wanchuan & Meng, Juanjuan & Weng, Xi, 2020. "Formal insurance and informal risk sharing dynamics," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 837-863.
    2. Mihm, Maximilian & Toth, Russell, 2020. "Cooperative networks with robust private monitoring," Journal of Economic Theory, Elsevier, vol. 185(C).
    3. Orraca Romano, Pedro Paulo, 2016. "Essays on development and labour economics for Mexico," Economics PhD Theses 0816, Department of Economics, University of Sussex Business School.
    4. Pedro Orraca-Romano, 2015. "Does access to free health insurance crowd-out private transfers? Evidence from Mexico’s Seguro Popular," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 24(1), pages 1-34, December.
    5. Shigute, Zemzem & Strupat, Christoph & Burchi, Francesco & Alemu, Getnet & Bedi, Arjun S., 2017. "The Joint Effects of a Health Insurance and a Public Works Scheme in Rural Ethiopia," IZA Discussion Papers 10939, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    public health insurance; informal transfer networks; crowding out; Ghana;
    All these keywords.

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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