Poverty, Ill-Health and Health Insurance in Pakistan

Research question/goal: 

This project asks how insurance against health shocks (that would constitute a major threat to labour productivity) affect health and labour markets in Pakistan. We consider not only health and poverty/vulnerability outcomes, but also other labour market outcomes such as child labour and migration. In countries with limited fiscal capacity, health insurance is only financially sustainable if it offers products and subcomponents that people are willing to pay for. In the project, we will evaluate individual, household and group-based insurance contracts with regard to their effects on adult labour input, child labour activities, schooling and health status. The analysis will also have a gender dimension to detect whether men and women are affected differently. Besides labour-market and migration consequences of offering health insurance we also assess the role of adverse selection, peer effects on take-up, moral hazard and informal risk-sharing transfers. Lessons drawn from this research on poor microfinance clients in Pakistan have important implications for neighbouring low-income countries in South Asia and beyond.

Current stage: 

The research project on health insurance in Pakistan currently analyses the outcomes of the phone surveys as well as the health insurance costs and claims for the providers. The preliminary results indicate a substantial degree of adverse selection. It appears that households indeed selectively insure household members and tend to pick those members with higher expected health costs. However, the degree of adverse selection decreases substantially once household insurance or group-based insurances are offered. Those policies not only lead to a larger quantity of insurance but also to an overall less precarious condition of the insured subpopulation.

Fact sheet

2015 to 2018
Data Sources: 
Client data of Pakistani microfinance organization
Geographic Space: