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21 January, Friday (3:00pm-5:00pm)
Session 7B: Evaluating Rural Projects

Health Shocks and Over-indebtedness: A Panel Data Analysis from Rural Viet Nam

Author/s: Panharoth Chhay, Dil Rahut

This study analyzes the effects of health shocks on over-indebtedness in rural Viet Nam using three rounds of a panel data set of about 1,600 households observed over almost ten years (2007, 2010, 2016). Employing the household-level fixed-effect model, this study finds that health shocks reduce household income and increase health expenditure among rural households in Viet Nam. The study also finds that households cope with health shocks mainly by borrowing from more sources. Households experiencing health shocks are 1.4 to 2.4 percentage points more likely to be over-indebted and that this consequence occurs mainly among the households without having health insurance, suggesting that social health insurance can reduce household’s vulnerability to the consequences of health shocks. These findings strongly support efforts to expand access to social health insurance in rural Viet Nam.

JEL codes: I13, I15