EuHEA Seminar: Emmanuel Rukundo (University of Bonn)

Title: "Effect of Health Insurance Premium Changes on Labour Supply: Evidence from Rwanda"

  • Data: 20 aprile 2022 dalle 14:30 alle 15:30

  • Luogo: Zoom

Emmanuel Rukundo
Emmanuel Rukundo

Abstract

This paper is the first empirical analysis to assess the effect of health insurance premium changes on labour markets in the context of a developing country. In 2011, the government of Rwanda implemented a health insurance premium policy change that increased insurance premiums for non-poor individuals by 200 % while proving poor households with waivers. We apply difference-in-differences with matching on national representative cross-sectional data to estimate the effect of increased premiums on labour supply in the short and medium term. We find that premium increases reduced time allocation to non- agricultural activities while increasing time allocation to subsistence agricultural activities with limited effect on total time worked. We provide a conceptual framework which allows for endogenous household responses due to changes in the health insurance premium via income thresholds. Households reduce labour supply possibly due to the negative incen- tives to gain premium waivers, i.e. to be classified as poor. Our results suggest that re- visiting the community-based targeting might be worthwhile in addressing the unintended effects of a possibly flawed targeting method.

Discussant: Owen O'Donnell (Erasmus University Rotterdam)

Chair: Marcos Vera-Hernandez (University College London)