Uptake of Health Insurance and the Productive Safety Net Program in Rural Ethiopia

29 Pages Posted: 4 Apr 2016

See all articles by Zemzem Shigute

Zemzem Shigute

Erasmus University Rotterdam (EUR) - Institute of Social Studies (ISS)

Anagaw Mebratie

Erasmus University Rotterdam (EUR)

Robert A. Sparrow

Wageningen UR - Development Economics Group; Erasmus University Rotterdam (EUR) - Institute of Social Studies (ISS); IZA Institute of Labor Economics

Zelalem Yilma

Erasmus University Rotterdam (EUR)

Getnet Alemu

Addis Ababa University

Arjun S. Bedi

Erasmus University Rotterdam - International Institute of Social Studies; IZA Institute of Labor Economics

Abstract

Due to lack of well-developed insurance, credit and labor markets, rural families in Ethiopia are exposed to a range of covariate and idiosyncratic risks. In 2005, to deal with the consequences of covariate risks, the government implemented the Productive Safety Net Program (PSNP) - an active labor market program to build rural assets, and in 2011, to mitigate the financial consequences of ill-health, the government introduced a pilot Community Based Health Insurance (CBHI) Scheme. This paper explores whether scheme uptake and retention is affected by access to the PSNP. Based on several rounds of household level panel data and qualitative information, the analysis shows that participating in the PSNP increases the probability of CBHI uptake by 24 percentage points and enhances scheme retention by 10 percentage points. Analysis of the channels through which the PSNP influences CBHI uptake indicates that the bulk of the effect may be attributed to explicit and implicit pressure applied by government officials on PSNP beneficiaries. Whether this is a desirable approach is debatable. Nevertheless, the results suggest that membership in existing social protection programs may be leveraged to spread new schemes and potentially accelerate poverty reduction efforts.

Keywords: productive safety net program, active labor market program, Ethiopia, community based health insurance, uptake of health insurance

JEL Classification: J65, J48, I13

Suggested Citation

Shigute, Zemzem and Mebratie, Anagaw and Sparrow, Robert A. and Yilma, Zelalem and Alemu, Getnet and Bedi, Arjun S., Uptake of Health Insurance and the Productive Safety Net Program in Rural Ethiopia. IZA Discussion Paper No. 9833. Available at SSRN: https://ssrn.com/abstract=2757923

Zemzem Shigute

Erasmus University Rotterdam (EUR) - Institute of Social Studies (ISS) ( email )

PO Box 29776
Den Haag, 2518 AX
Netherlands

Anagaw Mebratie

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Robert A. Sparrow

Wageningen UR - Development Economics Group ( email )

Hollandseweg 1
WAGENINGEN, 6706 KN
Netherlands

Erasmus University Rotterdam (EUR) - Institute of Social Studies (ISS) ( email )

PO Box 29776
Den Haag, 2518 AX
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Zelalem Yilma

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Getnet Alemu

Addis Ababa University ( email )

King George VI St
Addis Ababa, 1000
Ethiopia

Arjun S. Bedi (Contact Author)

Erasmus University Rotterdam - International Institute of Social Studies ( email )

PO Box 29776
2502 LT The Hague, 2518 AX
Netherlands
+31 70 426 0493 (Phone)
+31 70 426 0799 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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