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Faculty of Economics

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Liu, K.

Insuring against health shocks: health insurance and household choices

Journal of Health Economics

Abstract: This paper provides empirical evidence on the role of public health insurance in mitigating adverse outcomes associated with health shocks. Exploiting the rollout of a universal health insurance program in rural China, I nd that total household income and consumption are fully insured against health shocks even without access to health insurance. Household labor supply is an important insurance mechanism against health shocks. Access to health insurance helps households to maintain investment in children's human capital during negative health shocks, which suggests that one bene t of health insurance could arise from reducing the use of costly smoothing mechanisms. 

Author links: Kai Liu  


Papers and Publications



Recent Publications


Faraglia, E., Marcet, A., Oikonomou, R. and Scott, A. Government Debt management: the Short and the Long of it Review of Economic Studies, accepted [2018]

Carvalho, V. M. and Grassi, B. Large Firm Dynamics and the Business Cycle American Economic Review [2019]

Gagnon, J. and Goyal, S. Networks, markets and inequality American Economic Review [2017]