Are Health Shocks Different? Evidence from a Multi-Shock Survey in Laos
In Laos health shocks are more common than most other shocks and more concentrated among the poor. They tend to be more idiosyncratic than non-health shocks, and are more costly, partly because they lead to high medical expenses, but also because t...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100616081556 http://hdl.handle.net/10986/3825 |
| Summary: | In Laos health shocks are more common
than most other shocks and more concentrated among the poor.
They tend to be more idiosyncratic than non-health shocks,
and are more costly, partly because they lead to high
medical expenses, but also because they lead to income
losses that are sizeable compared with the income losses
associated with non-health shocks. Health shocks also stand
out from other shocks in the number of coping strategies
they trigger: they are more likely than non-health shocks to
trigger assistance from a nongovernmental organization and
other households, dis-saving, borrowing, asset sales, an
early harvest, the pawning of possessions, and the delaying
of plans; by contrast, they are less likely to trigger
assistance from government. Consumption regressions point to
only limited evidence of households not being able to smooth
consumption in the face of any shock. However, these results
contrast with households' own assessments of the
welfare impacts of shocks. The majority said they had to cut
back consumption following a shock and that shocks
considerably affected their welfare. Only health shocks are
worse than a drought in terms of the likelihood of a family
being forced to cut back consumption and in terms of the
shock affecting a family's well-being "a
lot." The poor are especially disadvantaged in terms of
the greater damage that health shocks inflict on household
well-being. Health shocks stand out too in leading to a loss
of human capital: household members experiencing a health
shock did not recover their former subjective health
following the health shock, losing, on average, 0.6 points
on a 5-point scale. The wealthier and better educated are
better able to limit the health impacts of a health shock;
the data are consistent with this being due to their greater
proximity to a health facility. |
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