Catastrophic Medical Expenditure Risk

Medical expenditure risk can pose a major threat to living standards. We derive decomposable measures of catastrophic medical expenditure risk from reference-dependent utility with loss aversion. We propose a quantile regression based method of estimating risk exposure from cross-section data containing information on the means of financing health payments. We estimate medical expenditure risk in seven Asian countries and find it is highest in Laos and China, and is lowest in Malaysia. Exposure to risk is generally higher for households that have less recourse to self-insurance, lower incomes, wealth and education, and suffer from chronic illness

Growing Richer and Taller: Explaining Change in the Distribution of Child Nutritional Status during Vietnam’s Economic Boom

Over a five-year period in the 1990s Vietnam experienced annual economic growth of more than 8% and a decrease of 15 points in the proportion of children chronically malnourished (stunted). We estimate the extent to which changes in the distribution of child nutritional status can be explained by changes in the level and distribution of income, and of other covariates. This is done using data from the 1993 and 1998 Vietnam Living Standards Surveys and a flexible decomposition technique that explains change throughout the complete distribution of child height. One-half of the decrease in the proportion of children stunted is explained by changes in the distributions of covariates and 35% is explained by change in the distribution of income. Covariates, including income, explain less of the decrease in very severe malnutrition, which is largely attributable to change in the conditional distribution of child height

Slipping Anchor?: Testing the Vignettes Approach to Identification and Correction of Reporting Heterogeneity

We propose tests of the two assumptions under which anchoring vignettes identify heterogeneity in reporting of categorical evaluations. Systematic variation in the perceived difference between any two vignette states is sufficient to reject vignette equivalence. Response consistency—the respondent uses the same response scale to evaluate the vignette and herself—is testable given sufficiently comprehensive objective indicators that independently identify response scales. Both assumptions are rejected for reporting of cognitive and physical functioning in a sample of older English individuals, although a weaker test resting on less stringent assumptions does not reject response consistency for cognition

Spending on Health Care in the Netherlands: Not Going so Dutch

The Netherlands is among the top spenders on health in the OECD. We document the life-cycle profile, concentration and persistence of this expenditure using claims data covering both curative and long-term care expenses for the full Dutch population. Spending on health care is strongly concentrated: the 1 per cent of individuals with the highest levels of expenditure account for one-quarter of the aggregate in any one year. Averaged over three years, the top 1 per cent still account for more than a fifth of the total, indicating a very high degree of persistence in the largest expenses. Spending on longterm care, which amounts to one-third of all expenditure on health care, is even more concentrated: the top 1 per cent account for more than half of total spending on this type of care. Average expenditure rises steeply with age and even more so with proximity to death. Spending on individuals in their last year of life absorbs one-tenth of aggregate health care expenditure. In a given year, spending on health care is highly skewed toward individuals with lower incomes. Average expenditure on the poorest fifth is more than three times that on the richest fifth

Long-Run Returns to Education

While there is no doubt that health is strongly correlated with education, whether schooling exerts a causal impact on health is not firmly established. We exploit a Dutch compulsory schooling law to estimate the causal effect of education on mortality. The reform provides a powerful instrument, significantly raising years of schooling, which, in turn, has a significant and robust negative effect on mortality. For men surviving to age 81, an extra year of schooling is estimated to reduce the probability of dying before the age of 89 by almost three percentage points relative to a baseline of 50 percent

Long Run Returns to Education: Does Schooling Lead to an Extended Old Age?

While there is no doubt that health is strongly correlated with education, whether schooling exerts a causal impact on health is not yet firmly established. We exploit Dutch compulsory schooling laws in a Regression Discontinuity Design applied to linked data from health surveys, tax files and the mortality register to estimate the causal effect of education on mortality. The reform provides a powerful instrument, significantly raising years of schooling, which, in turn, has a large and significant effect on mortality even in old age. An extra year of schooling is estimated to reduce the probability of dying between ages of 81 and 88 by 2-3 percentage points relative to a baseline of 50 percent. High school graduation is estimated to reduce the probability of dying between the ages of 81 and 88 by a remarkable 17-26 percentage points but this does not appear to be due to any sheepskin effects of finishing high school on mortality beyond that predicted lin early by additional years of schooling

Health and Inequality

__Abstract__ We examine the relationship between income and health with the purpose of establishing the extent to which the distribution of health in a population contributes to income inequality and is itself a product of that inequality. The evidence supports a significant and substantial impact of ill-health on income mainly operating through employment, although it is difficult to gauge the magnitude of the contribution this makes to income inequality. Variation in exposure to health risks early in life is a potentially important mechanism through which health may generate, and possibly sustain, economic inequality. If material advantage can be excercised within the domain of health, then economic inequality will generate health inequality. In high income countries, the evidence that income (wealth) does have a causal impact on health in adulthood is weak. But this may simply reflect the difficulty of identifying a relationship that, should it exist, is likely to emerge over the lifetime as poor material living conditions slowly take their toll on health. There is little credible evidence to support the claim that the economic inequality in society threatens the health of all its members, or that relative income is a determinant of health

Are Urban Children really healthier?

On average, child health outcomes are better in urban than in rural areas of developing countries. Understanding the nature and the causes of this rural-urban disparity is essential in contemplating the health consequences of the rapid urbanization taking place throughout the developing world and in targeting resources appropriately to raise population health. We use micro data on child health taken from the most recent Demographic and Health Surveys for 47 developing countries. First, we document the magnitude of rural-urban disparities in child nutritional status and under-five mortality across all 47 developing countries. Second, we adjust these disparities for differences in population characteristics across urban and rural settings. Third, we examine rural-urban differences in the degree of socioeconomic inequality in these health outcomes. We find considerable rural-urban differences in mean child health outcomes. The rural-urban gap in stunting does not entirely mirror the gap in under-five mortality. The most striking difference between the two is in the Latin American and Caribbean region, where the gap in stunting is more than 1.5 times higher than that in mortality. On average, the rural-urban risk ratios of stunting and under-five mortality fall by respectively 53% and 59% after controlling for household wealth. Controlling thereafter for socio-demographic factors reduces the risk ratios by another 22% and 25%. In a considerable number of countries, the urban poor actually have higher rates of stunting and mortality than their rural counterparts. The findings imply that there is a need for programs that target the urban poor, and that this is becoming more necessary as the size of the urban population grows

What explains the Rural-Urban Gap in Infant Mortality — Household or Community Characteristics?

The rural-urban gap in infant mortality rates is explained using a new decomposition method that permits identification of the ontribution of unobserved heterogeneity at the household and the community level. Using Demographic and Health Survey data for six Francophone countries in Western Sub-Saharan Africa, we find that differences in the distributions of factors that determine mortality – not differences in their effects – explain almost the entire gap. Higher infant mortality rates in rural areas mainly derive from the rural disadvantage in household level characteristics; both observed and unobserved, which explain three-quarters of the gap. Among the observed characteristics, household environmental factors—potable water, electricity and quality of housing materials—are the most important contributors explaining 38% of the gap. Unobserved household level determinants explain 10% of the gap. Community level determinants explain 13% of the gap, including 3% that is due to unobservable community level heterogeneity