The effects of public health insurance in labor markets with informal jobs: Evidence from Mexico |
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| Affiliation: | 1. Frank Batten School of Leadership & Public Policy University of Virginia, United States;2. Frank Batten School of Leadership & Public Policy, University of Virginia and National Bureau of Economic Research, United States;1. IRES/LIDAM, UCLouvain; FNRS - Fonds de la Recherche Scientifique, Belgium, and Department of Economics, Lancaster University;2. Department of Economics, Lancaster University Management School, Bailrigg Lancaster LA1 4YX, UK;3. Dipartimento G.E.S., Universita’ Magna Graecia, Catanzaro, Italy |
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| Abstract: | This paper studies the labor market effects of the most significant public health insurance expansion in the Americas: Mexico's Seguro Popular (SP). To identify its impact, I exploit the staggered rollout of SP across municipalities. I find that SP increases labor supply by reducing the likelihood of informal workers exiting the labor market. This reduction is driven by women, who experience a 15% decrease in the probability of transitioning from informal employment to inactivity. I also find that this reduction is concentrated among female secondary earners residing in households with dependents. These findings suggest that SP may operate through a novel channel, namely that health insurance enables caregivers to continue working by reducing health shocks among dependents. |
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| Keywords: | Public health insurance Female employment Health shocks Caregiving |
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