Crowding out of solidarity? Public health insurance versus informal transfer networks in Ghana

Bochum: Ruhr-Universität Bochum (RUB), Department of Economics (Ruhr Economic Papers 432)

This paper delivers empirical evidence on how informal transfers are affected by a formal and country-wide health insurance scheme. Using the fifth wave of the Ghanaian Living Standard Household Survey, we investigate the extent to which the exogenous implementation of the National Health Insurance Scheme affects the probability of making or receiving informal transfers and their monetary equivalents. Our findings suggest that there is a significant crowding out of informal transfers. Members of weak transfer networks and individuals that run an enterprise are inclined to reduce their amount of remittances. We conclude that the provision of formal health insurance can reduce covariate risk in weak transfer networks and support business owners that are confronted by strong sharing obligations.

About the author

Strupat, Christoph

Economist

Further experts

Balasubramanian, Pooja

Social Economics 

Burchi, Francesco

Development Economy 

Loewe, Markus

Economy