Public Health Insurance and the Labor Market: Evidence from China's Urban Resident Basic Medical Insurance

Abstract

This paper provides empirical evidence on the labor market effects of public health insurance using evidence from China. In 2007, China launched a national public health insurance program, Urban Resident Basic Medical Insurance (URBMI), targeting residents in urban areas who were not insured by employment-based health insurance. Using panel data from the China Health and Nutrition Survey, I identify the impacts of the program based on its staggered implementation across cities. I find that URBMI did not have a significant average causal effect on labor force participation. However, it did increase employment mobility, as evidenced by the decrease in long-term employment and expansion of fixed-term contract jobs and self-employment. After the program was implemented, job lock declined and job flexibility increased, especially among women, the less educated, and individuals with good health status. The results also suggest increased employment for unhealthy workers, indicating a direct health improvement effect.