Does health insurance mitigate the economic impact of negative health outcomes? Evidence from Ghana’s National Health Insurance Scheme
Date
2023
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Journal of Social and Economic Development
Abstract
In many developing countries, financial risk protection for health is under-developed and
negative health outcomes can be impoverishing. In this study, we sought to investigate the
impact of negative health outcomes on household welfare and the role of public health
insurance to mitigate this impact. We used data from the seventh round of the Ghana
Living Standards Survey (GLSS). To address the potentially non-random nature of the
health insurance scheme, the Lewbel instrumental variable estimation technique was used.
The results suggest that more days of illness lead to fewer hours of labour supply and this
result was statistically significant across all specifications. We found evidence of a heterogeneous impact of negative health outcomes through health insurance coverage on hours of
labour supply for the full sample. We also find that for rural dwellers and informal sector
workers, days of illness reduced labour supply, while the impact was relatively less with
health insurance coverage. The findings call for policies that focus on reforming the NHIS
to ensure effectiveness and achieve its primary objectives of removing financial barriers to
health care in Ghana.
Description
Research Article
Keywords
Health insurance, Health outcomes, Labour supply