Health Insurance Premium Changes and Labor Supply: Evidence from a Low Income Country
We study the effect of a health insurance premium change on labour supply. Using a matching with difference-in-differences strategy on a pooled nationwide cross-sectional and panel data, we find that both premium waivers and premium increased led to a reduction in labor supply by almost similar margins. We also show that the policy change reduced the probability of wage employment and increased domestic labour supply,, pointing to potential income effects for waivers and potential manipulation effects for premium increases. Our results are robust fo various specifications and raise concerns of the unintended effects of popular but likely inefficient community-based welfare targeting methods.