Does Abolishing User Fees Lead to Improved Health Status? Evidence from Post-Apartheid South Africa

Abstract

Whether user fees for basic health services should be charged or abolished for the poor has recently been debated. This study examines the impact on child health status of removing user fees in South Africa. Our main innovation is to exploit plausibly exogenous variation in access to free healthcare, due to the fact that black Africans under apartheid could exercise little political power and residential choice. By comparing health development across ex ante similar children, we find that free healthcare improved the health status to a greater extent for boys than for girls. Falsification exercises suggest that the results are not driven by preexisting trends or unobserved concurrent changes.

Keywords: user fees, healthcare, child health, South Africa

JEL Classification: I11, I18, J13, H51, O15