China & World Economy / 101–124, Vol. 28, No. 6, 2020

Public Health Insurance and Farm Labor Supply: Evidence
from China’s Rural Health Insurance Reform Tianyuan Luo, Cesar L. Escalante

Abstract

This study examines the impact of China’s public health insurance program on the farm employment decisions of the rural population. Using a difference-in-differences (DID) model, this study indicates that the public health insurance reform led to reallocation of the rural labor force out of the farm sector by reducing the farm employment and increasing the likelihood of rural residents working in both the farm and nonfarm sectors. This research finds that rural female residents who are of a younger age and in better health were more likely to leave farm employment when covered by public health insurance. Suggestive evidence also finds that such public health insurance reform increased the individual income of the farm population.