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COPING WITH THE ECONOMIC CONSEQUENCES OF ILL HEALTH IN INDONESIA
Author(s) -
Sparrow Robert,
Poel Ellen Van,
Hadiwidjaja Gracia,
Yumna Athia,
Warda Nila,
Suryahadi Asep
Publication year - 2014
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.2945
Subject(s) - coping (psychology) , informal sector , population , economics , consumption (sociology) , panel data , labour economics , business , public economics , demographic economics , economic growth , environmental health , medicine , social science , psychiatry , sociology , econometrics
We assess the economic risk of ill health for households in Indonesia and the role of informal coping strategies. Using household panel data from the Indonesian socio‐economic household survey (Susenas) for 2003 and 2004, and applying fixed effects Poisson models, we find evidence of economic risk from illness through medical expenses. For the poor and the informal sector, ill health events impact negatively on income from wage labour, whereas for the non‐poor and formal sector, it is income from self‐employed business activities which is negatively affected. However, only for the rural population and the poor does this lead to a decrease in consumption, whereas the non‐poor seem to be able to protect current household spending. Borrowing and drawing on family network and buffers, such as savings and assets, seem to be key informal coping strategies for the poor, which may have negative long‐term effects. While these results suggest scope for public intervention, the economic risk from income loss for the rural poor is beyond public health care financing reforms. Rather, formal sector employment seems to be a key instrument for financial protection from illness, by also reducing income risk. © 2015 The Authors. Health Economics Published by John Wiley & Sons, Ltd.