Mobile Payment and Informal Business: Evidence from China's Household Panel Data

This paper uses household panel data to explore the impact of mobile payments on China's household business activity. Using a difference‐in‐difference fixed effect specification, I find that mobile payment users are more likely to operate small‐scale and self‐employed informal businesses. The impact of using mobile payment primarily derives from the transition of agricultural families to business owners and the development of informal businesses. The paper illustrates an associated increase in employment and income for family members, with more pronounced effects on low‐income and rural households. It also provides prima facie evidence of the increase in fund transfers, which is important for risk sharing that informal businesses may encounter.     

Vulnerability of households to health shocks: an Indonesian study

We examine the effect of illness and injury shocks on work hours and household consumption in Indonesia. Using indices of activities of daily living to measure health shocks, we find that both labour hours and household consumption are influenced by health shocks to household heads. Further, farm households seem to be more seriously affected than non-farm households by health shocks. However, the magnitude of the health effect on household consumption is small, implying that even farm households are well protected on average by the presence of formal and informal risk-coping mechanisms.     

Impacts of the COVID-19 crisis on single-person households in South Korea

Using nationally representative income and expenditure data from South Korea, we show that single-person households suffered a much greater decrease in household income and expenditure compared to multi-persons households during the COVID-19 pandemic in 2020. Negative effects on income were largest for the single-person households in ages 50—64, mostly driven by decreases in earned income rather than business income. There was no corresponding decrease in consumption expenditures, however, other than on transportation expenditure for young men. Notably, there were significant decreases in non-consumption expenditures that are related to formal and informal consumption-smoothing mechanisms, such as spending on insurances, pensions, and household transfers. Our findings highlight the disproportionately negative effects of the COVID-19 pandemic on the middle-aged single-person households. With reduced spending on consumption-smoothing mechanisms, this group is likely to be even more vulnerable to negative income shocks in the future.     

The consequences of health shocks on households: Evidence from China

Unexpected health shocks may bring catastrophic consequences for households. This paper examines the effect of unexpected adverse health shocks on household members' physical and mental health, labor supply, household income and asset, and health behaviors in China by analyzing two nationally representative datasets and adopting a difference-in-differences method augmented with coarsened exact matching. We find that an unexpected health shock results in a discounted out-of-pocket medical expenditure of 16,943 RMB (US$ 2647) over five years for an average household, a reduction of household income per capita of 841 RMB per year (US$ 131, or 6.0% of household annual income per capita), and a loss of net household asset per capita of 13,635 RMB (US$ 2130, or 9.7% of household asset per capita). It raises the probability of an average household applying for public poverty relief allowance by 2.8 percentage points. In addition, we document a strong intra-household spillover effect of health shocks on mental health and health behaviors. A simple back-of-envelope calculation shows that the health shock induces a private cost of 34,966 RMB (US$ 5463) over 5 years for an average household, and incurs a social financial burden of 6066 RMB (US$ 948) in 5 years per household in medical reimbursement and social welfare transfers. At a national scale, the total social burden of health shocks from cardiovascular and cerebrovascular diseases amounts to 1.1 trillion RMB (US$ 172.1 billion) over 5 years.     

ARE PRIVATE TRANSFERS CROWDED OUT BY PUBLIC TRANSFERS? THE CASE OF NEPAL

Using household data from Nepal for 1995/96, this paper investigates the motives underlying private transfers and examines whether or not public transfers crowded out private transfers and the resultant effects on income inequality. The estimation results of Probit and Tobit models show that the private transfers received were altruistically motivated while public transfers exerted no crowding‐out effect. Although the probability of receiving private transfers decreases with household size, having more children or more elderly members of the family increases the probability as well as the amount of transfers. By contrast, the age of the household head does not appear to be a significant factor. Furthermore, the study shows that public transfers did not contribute to a lowering of income inequalities among households. These findings suggest that the Government of Nepal should design its public transfer schemes in order to improve the effectiveness and efficiency of its social safety net programs.     

Risk Management and Social Visibility in Ghana*

Abstract: In this paper we test for risk pooling within and among social networks to see if the extent of informal insurance available to individuals in rural Ghana varies with their social visibility. We identify a distinct subpopulation of socially invisible individuals who tend to be younger, poorer, engaged in farming, recent arrivals into the village who have been fostered and are not members of a major clan. While we cannot reject the null hypothesis that individual shocks do not affect individual consumption and that individual consumption tracks network and village consumption one‐for‐one among the socially visible, risk pooling fails for the socially invisible subpopulation. These results have important implications for the design of social protection policy.     

Access to savings and household welfare evidence from a household survey in The Gambia

In this study, we provide evidence on the impact of access to formal savings on household well‐being in The Gambia. Specifically, we study how access to formal savings can impact household outcomes such as total spending, ownership of durable assets, health spending, and education spending. Using a representative household survey and kernel ridge regression method, we find that household access to formal savings has a positive and statistically significant impact on all outcomes except health spending. Furthermore, we find that the largest effect size of access to savings is on education spending. However, the impact estimates on education and food expenditure are not very robust to a mild presence of hidden bias. Overall, we find a robust impact for total spending and asset ownership. Hence, increasing household access to formal savings can improve household well‐being in The Gambia.     

Measuring the Impact of Microfinance on Child Health Outcomes in Indonesia

Microfinance has become a staple of modern development policy as a means to facilitate anything from gender equality to growth. It can facilitate the sharing of health-related information among parents, promote the bargaining power of women in the household, aid in the development of important health-related infrastructure, and help households smooth consumption in the wake of unexpected economic shocks. Using data from the Indonesian Family Life Survey (1993–2000), we find that the presence of microfinance institutions in communities significantly improves the health of children.     

Risk‐Coping Measures against Health Shocks during the Process of Penetration of Health Insurance in Vietnam

Does the recent introduction of public health insurance influence households' risk‐coping measures in developing countries? This study investigates risk‐coping measures for health shocks using a Living Standard Measurement Survey in Vietnam where universal health coverage is aimed to be achieved. The estimated results suggest that precautionary savings are the main form of assets in poor households. Health insurance seems to be used by people in poor health, which indicates that the problem of adverse selection exits. Importantly, get well gifts in the form of money play a significant role in helping households cope with health shocks. A traditional informal insurance system still exists in close Vietnamese communities.     

EVALUATION OF CONTINGENT REPAYMENTS IN MICROFINANCE: EVIDENCE FROM A NATURAL DISASTER IN BANGLADESH

Frequent and strictly scheduled repayments and savings in microfinance often deteriorate the liquidity of members in the face of negative shocks. Previous articles suggest the introduction of a contingent repayment system that allows such members to be rescheduled, but the unavailability of a suitable dataset makes it difficult to examine how it would actually work. This study is one of the first to evaluate the impact of this repayment system on household livelihood. In employing a unique dataset from Bangladesh, I show that rescheduling reduces the possibility of binding credit constraints and borrowing from moneylenders, and may also reduce transitory poverty. However, short‐term rescheduling has insignificant effects. Indebted members with less liquid assets are more likely to be rescheduled.     

Socioeconomic Determinants of Child Health: Empirical Evidence from Indonesia

This paper characterizes the socioeconomic determinants of child health using height‐for‐age z‐score (HAZ), a long‐run measure of chronic nutritional deficiency. We construct a panel data that follows children between ages 3 and 59 months in 1993 through the 1997 and 2000 waves of the Indonesian Family Life Survey. We use this data to identify the various child‐level, household‐level and community‐level factors that affect children's health. Our findings indicate that household income has a large and statistically significant role in explaining improvements in HAZ. We also find a strong positive association between parental height and HAZ. At the community level, we find that provision of electricity and the availability of paved roads are positively associated with improvements in HAZ. Finally, in comparison to community‐level factors, household‐level characteristics play a large role in explaining the variation in HAZ. These findings suggest that policies that address the demand‐side constraints have greater potential to improve children's health outcomes in the future.     

Intra‐provincial Revenue Sharing and the Subnational Government's Fiscal Capacity in China: The Case of Zhejiang Province

This study investigates whether the tax‐sharing system has deteriorated the fiscal capacity of subnational governments by analyzing how fiscal revenues are divided between provincial and sub‐provincial governments. Our study of county‐level fiscal data from Zhejiang Province in China during 1994–2007 shows that intra‐provincial revenue‐sharing rules favor county governments in two ways: (i) they improve county governments ‘fiscal autonomy in terms of using their own revenues; and (ii) they enhance county governments ‘fiscal capacity through province‐to‐county general transfers. In addition, we find that intra‐provincial fiscal revenue‐sharing rules and transfers reduce fiscal disparity between counties.     

Digital Financial Inclusion and Consumption Smoothing in China

In this paper, we investigate the effect of digital financial inclusion (DFI) on household consumption smoothing in China. We use four waves of the biennial China Family Panel Studies from 2010 to 2016, during which time DFI has significantly developed alongside financial technology across China. We split household income shocks into permanent and transitory components, and evaluate if DFI may help households to buffer against these shocks. We find that households are not able to insure against permanent shocks to income, but they can smooth approximately 70 percent of transitory shocks to income. We also find that DFI has diminished households’ ability to insure against transitory income shocks. This is partly because online purchase may lead to the oversensitivity of consumption to income. In addition, we find that contrary to DFI, traditional financial sector development contributes to better household consumption smoothing against transitory income shocks.     

Education and family health care spending

Michael Grossman's seminal work on the demand for health extended the concept of a household production function to the commodity “good health.” In this framework, education represents an “environmental variable” that enhances the monetary returns to investments in health through the use of time and medical care in health production. Using data from the 2004 to 2012 Medical Expenditure Panel Survey (MEPS), we examine the association between parental education and family health care spending in single-mother and two-parent families. We estimate one- and two-part expenditure models for total family health care spending, for specific components of such spending, and also examine the impact of parental education on selected measures of family health. Controlling for family income and health insurance status, we find consistent evidence that parental education beyond 12 years of schooling is associated with increases in family health care spending and with reductions in the likelihood of adverse health conditions.     

Inter-vivos Transfers and Exchange

Most parents divide their bequests equally among their children, whereas inter-vivos transfers are usually unequal. We propose that exchange is better for inducing inter-vivos transfers than bequests. Inter-vivos transfers can be adjusted quickly to the amount of care, are less costly than writing a will, and can be kept secret from other family members and the public. The results from national longitudinal data show that, as expected, if a parent gives any inter-vivos transfers, she is more likely to give to children who provide informal care. Informal care has no effect on the equality of intended bequests.     

British working‐class household composition,labour supply,and commercial leisure participation during the 1930s

The early twentieth century constituted the heyday of the ‘breadwinner–homemaker’ household, characterized by a high degree of intra‐household functional specialization between paid and domestic work according to age, gender, and marital status. This article examines the links between formal workforce participation and access to resources for individualized discretionary spending in British working‐class households during the late 1930s, via an analysis of household leisure expenditures. Leisure spending is particularly salient to intra‐household resource allocation, as it constitutes one of the most highly prioritized areas of individualized expenditure, especially for young, single people. Using a database compiled from surviving returns to the Ministry of Labour's national 1937/8 working‐class expenditure survey, we examine leisure participation rates for over 600 households, using a detailed set of commercial leisure activities together with other relevant variables. We find that the employment status of family members other than the male breadwinner was a key factor influencing their access to commercial leisure. Our analysis thus supports the view that the breadwinner–homemaker household was characterized by strong power imbalances that concentrated resources—especially for individualized expenditures—in the hands of those family members who engaged in paid labour.     

Social Assistance Amidst the COVID-19 Epidemic in South Africa: A Policy Assessment

In an attempt to minimise the negative economic impacts of COVID-19 on vulnerable households the South African government allocated R50 billion in additional social assistance spending. The cash transfer package included a temporary increase in existing grants and introduced a new “Covid grant.” We assess the chosen package and compare it with an initial proposal to increase the Child Support Grant (CSG). Coverage, cost and welfare effects are calculated to measure the relative impacts in each case. We find that while a significant increase in the CSG delivers resources most progressively, the addition of the COVID-19 grant may potentially reach a much larger group of otherwise uncovered, vulnerable individuals. Critically, this extended coverage comes at a cost to the poorest households, via additional transfers to the upper income deciles. However, we identify several categories of vulnerable household groups which suggests that the workers most negatively affected by the pandemic are not necessarily those in the poorest households. The paper emphasises that social assistance to mitigate the consequences of COVID-19 should not be viewed necessarily as a standard poverty reduction exercise, but rather as an attempt to mitigate COVID-19-related income shocks for the vulnerable who were most negatively affected by the pandemic.     

健康冲击、数字普惠金融与家庭消费

基于中国家庭金融调查(CHFS)数据和"北京大学数字普惠金融指数",分析健康冲击对家庭消费的影响,以及数字普惠金融在其中所起的作用。基于固定效应模型的实证结果表明,健康冲击显著降低了家庭的非医疗消费支出,但数字普惠金融能有效地减轻这种影响;同时就分指标而言,数字普惠金融指标体系一级维度中的覆盖广度和使用深度,二级维度中的信贷、保险、货币基金以及支付这四个子指标均显著地平滑了冲击下的家庭消费。就作用机制而言,数字普惠金融主要通过缓解家庭流动性约束和强化非正式社交网络来帮助家庭应对健康冲击对消费的影响。异质性分析的回归结果显示,健康冲击对中西部地区、户主受教育水平较低以及金融素养水平较低的家庭影响更大,同时这种影响还与冲击的程度正相关,进而数字普惠金融的积极作用在这部分家庭中表现得更为明显。文章的研究结论进一步阐述了数字普惠金融发展对改善金融包容性的重要现实意义,并在微观层面上解释了数字普惠金融发展对改善家庭福利、防止因病致贫返贫的积极作用。     

Consumption risk sharing and self-insurance across provinces in China: 1952–2008

This paper investigates the extent to which idiosyncratic shocks to the permanent income of various provinces in China were mitigated through the channel of provincial risk-sharing during 1952–2008. Taking into account the possibility of self-insurance through saving, we find that provinces in China shared roughly 38% of their idiosyncratic output shocks during the entire sample period. In particular, we show that conventional risk-sharing analysis in the extant literature that does not take into account the self-insurance channel tends to over-estimate the degree of risk sharing by implying a degree of risk sharing of around 54%. Moreover, in view of the major economic reforms that had taken place in the last few decades, we decompose the sample period into two sub-phases: the pre-reform period (1952–1978), the reform period (1978–2008). We find that there is a notable increase in the degree of provincial risk sharing in the reform period. The degree of provincial risk sharing across China is comparable to that across the OECD countries, but falls short of that among the states in the US.     

Beyond Income: What Else Predicts Very Low Food Security Among Children?

We examine characteristics and correlates of households in the United States that are most likely to have children at risk of inadequate nutrition—those that report very low food security (VLFS) among their children. Using 11 years of the Current Population Survey, plus data from the National Health and Nutrition Examination Survey (NHANES), we describe these households in great detail with the goal of trying to understand how these households differ from households without such severe food insecurity. While household income certainly plays an important role in determining VLFS among children, we find that even after flexibly controlling for income‐to‐poverty rates some household characteristics and patterns of program participation have important additional explanatory power. Finally, our examination of the NHANES data suggests an important role for both mental and physical health of adults in the household in determining the food security status of children.