Insuring Consumption Against Illness.

By Paul J. Gertler, Jonathan Gruber. The American Economic Review, 2002

933 citations recorded by the source corpus.

One of the most sizable and least predictable shocks to economic opportunities in developing countries is major illness. We investigate the extent to which families are able to insure consumption against major illness using a unique panel data set from Indonesia that combines excellent measures of health status with consumption information. We find that there are significant economic costs associated with major illness, and that there is very imperfect insurance of consumption over illness episodes. These estimates suggest that public disability insurance or subsidies for medical care may improve welfare by providing consumption insurance.

Subfields: Economics and Econometrics, General Health Professions, Soil Science

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Citations in the corpus

Rural poverty dynamics: development policy implications (2003, background): “Well-designed and implemented cargo nets can set people onto pathways out of chronic poverty.”
Risk-sharing networks and insurance against illness (2006, methodology): “Following Gertler and Gruber (2002), Morduch (2001) and others, we will test risk-sharing not just for total consumption, but also for food and non-food consumption separately.”
Earnings, consumption and lifecycle choices (2010, background): “Gertler and Gruber (2002) look at the effect of income shocks arising from major illness on consumption in Indonesia.”
Mobile money and risk sharing against village shocks (2018, methodology): “†This is the specification form used by Jack and Suri (2014) which also follows Gertler and Gruber (2002)”
Shocks, Coping, and Outcomes for Pakistan's Poor: Health Risks Predominate (2009, background): “Further, Gertler and Gruber (2002) using panel data from Indonesia, find significant economic costs associated with illness that stem more from income loss than from medical expenditures, limiting the relevance of conventional health insurance.”
Macroeconomics and health: investing in health for economic development (2002, background): “Gertler and Gruber (2001) estimate that 35 percent of the costs of serious illness”
THE EFFECT OF MARKET ECONOMIES ON THE WELL-BEING OF INDIGENOUS PEOPLES AND ON THEIR USE OF RENEWABLE NATURAL RESOURCES (2005, background): “Formal systems of self-insurance (e.g., credit) can improve well-being by allowing households to smooth consumption (Gertler & Gruber 2002).”
Localized and incomplete mutual insurance (2002, background): “…over which to assess the effectiveness of insurance , all studies reject the hypothesis of full community-wide insurance against idiosyncratic risk (Deaton, 1992; Townsend, 1994; Gertler and Gruber, 1997; Ligon, 1998; Ligon, Thomas, and Worall, 1998; Foster and Rosenzweig, 1999; Grimard, 1997 1 ).”
Poverty Traps and Climate Risk: Limitations and Opportunities of Index-Based Risk Financing (2007, background): “…transmission compound the losses and precipitate Working Paper Poverty Traps and Climate Risk: Limitations and Opportunit ies of Index-Based Risk Financing 4 human health shocks that are especially strongly associated with long-term collapse into poverty (Gertler and Gruber 2000; Krishna 2006).”
After the Drought: The Impact of Microinsurance on Consumption Smoothing and Asset Protection (2013, positive): “…likely come at the cost of immediately reduced consumption, with potentially irreversible losses in 1 Classic studies of consumption smoothing include Deaton 1991; Paxson 1992; Rosenzweig and Wolpin 1993; Morduch 1995; Townsend 1995; Fafchamps, Udry, and Czukas 1998; and Gertler and Gruber 2002.”