Details
| Original language | English |
|---|---|
| Journal | Applied Economic Perspectives and Policy |
| Early online date | 2 Jan 2025 |
| Publication status | E-pub ahead of print - 2 Jan 2025 |
Abstract
Households in developing countries are often impaired in their economic opportunities by major health shocks. In this article, we first investigate the impact of a health shock on rural household consumption and explore the mechanisms how the health shock brings a household into indebtedness. We then examine the role of health insurance in reducing the reliance on borrowing as a shock coping strategy. Our estimations show that while rural households are able to insure non-health-related consumption, a health shock pushes them into severe indebtedness by increasing informal borrowing to smooth consumption. Promotion of health insurance is recommended as it helps to protect households from falling into severe indebtedness when a health shock strikes.
Keywords
- consumption smoothing, health insurance, health shock, indebtedness
ASJC Scopus subject areas
- Social Sciences(all)
- Development
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
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In: Applied Economic Perspectives and Policy, 02.01.2025.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - Health shock and indebtedness
T2 - Does having access to health insurance reduce the reliance on borrowing as a shock coping strategy?
AU - Nguyen, Linh D.
AU - Nguyen, Thanh T.
AU - Nguyen, Thanh T.
AU - Grote, Ulrike
N1 - Publisher Copyright: © 2025 The Author(s). Applied Economic Perspectives and Policy published by Wiley Periodicals LLC on behalf of Agricultural & Applied Economics Association.
PY - 2025/1/2
Y1 - 2025/1/2
N2 - Households in developing countries are often impaired in their economic opportunities by major health shocks. In this article, we first investigate the impact of a health shock on rural household consumption and explore the mechanisms how the health shock brings a household into indebtedness. We then examine the role of health insurance in reducing the reliance on borrowing as a shock coping strategy. Our estimations show that while rural households are able to insure non-health-related consumption, a health shock pushes them into severe indebtedness by increasing informal borrowing to smooth consumption. Promotion of health insurance is recommended as it helps to protect households from falling into severe indebtedness when a health shock strikes.
AB - Households in developing countries are often impaired in their economic opportunities by major health shocks. In this article, we first investigate the impact of a health shock on rural household consumption and explore the mechanisms how the health shock brings a household into indebtedness. We then examine the role of health insurance in reducing the reliance on borrowing as a shock coping strategy. Our estimations show that while rural households are able to insure non-health-related consumption, a health shock pushes them into severe indebtedness by increasing informal borrowing to smooth consumption. Promotion of health insurance is recommended as it helps to protect households from falling into severe indebtedness when a health shock strikes.
KW - consumption smoothing
KW - health insurance
KW - health shock
KW - indebtedness
UR - http://www.scopus.com/inward/record.url?scp=85214023639&partnerID=8YFLogxK
U2 - 10.1002/aepp.13495
DO - 10.1002/aepp.13495
M3 - Article
AN - SCOPUS:85214023639
JO - Applied Economic Perspectives and Policy
JF - Applied Economic Perspectives and Policy
SN - 2040-5790
ER -