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Title: Beyond medical expenditure : estimating the impact of health shocks on the welfare and socio-economic outcomes of Chinese households
Author: Chi, Y-Ling
Awarding Body: University of Oxford
Current Institution: University of Oxford
Date of Award: 2016
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Several reviews have shown that health problems are the single most common adverse event experienced by households in many low- and middle-income countries. There is a great deal of research documenting household health expenditure and its impact on poverty. However, evidence on the costs incurred by households outside of the health care system is at best scattered. The objective of this present study is to document the household response to illness in China using two large-scale panel household surveys and following a 'health shocks' approach. Health shocks are used to address endogeneity concerns associated with the use of alternative traditional health measures. In this manuscript, the impact of health shocks on household socio-economic status and welfare is analysed using a framework encompassing household income, medical expenditure, consumption patterns, coping strategies, and labour force supply. We find that health shocks lead to a significant increase in medical expenditure (significant for all types of shocks), and in the case of a health shock experienced by a household head, to a decrease in income ranging around five per cent of the total household income. This decrease in income is partly explained by a statistically significant reduction in labour force supply (work hours and labour force participation) from individuals who experienced a shock (larger for women and elderly). In addition, for rural-to-urban migrant workers, health shocks are associated with a higher probability of returning. However, spouses also increase their labour force supply in response, which helps avoiding large shortfalls in income. Significant coping strategies include increase in debts and remittances; and in some cases, sale of assets. On consumption, households are mostly able to maintain consumption levels following the occurrence of a health shock (with the exception of food consumption). Nonetheless, we find a significant large negative trailing impact on consumption in subsequent years. This is in line with the literature arguing that households are risk adverse and deploy ineffective coping strategies to avoid immediate shortfalls in consumption, which generate delayed costs in the long run. The results of the analyses carried out in this thesis highlight some of the potential channels of impoverishment due to health shocks, which might be of interest for policy makers, especially in China where a large-scale health system reform is currently taking place.
Supervisor: Yip, Winnie ; Giuntella, Osea Sponsor: Stanley Thomas Johnson Foundation
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: Health Economics ; China ; Health shocks