Health Insurance,Agricultural Credit And Targeted Poverty Alleviation

Eliminating poverty is a long-term task for all countries in the world in the process of economic development,and it is also an important research topic of development economics.Since the 18 th National Congress of the Communist Party of China,by the end of 2020,China has won an all-round victory in the fight against poverty and completed the arduous task of eradicating absolute poverty(National Poverty Alleviation Summary and Commendation Conference,2021).The Fourth Plenary Session of the 19 th Central Committee of the Communist Party of China has proposed that a long-term mechanism for solving relative poverty should be established.In the future,the focus of my country’s poverty alleviation work will shift from solving absolute poverty to targeting relative poverty.However,due to various reasons,coupled with the impact of the new crown pneumonia epidemic,some people who have been out of poverty are at risk of returning to poverty,and some marginalized people are at risk of becoming poor.Therefore,more attention needs to be paid to preventing the people who have been lifted out of poverty from returning to poverty(National Development [2020] No.6).Therefore,aiming at the main causes of poverty and returning to poverty of the poor,achieving "precise policy" in policy design and the use of tools is the key to solving absolute and relative poverty and preventing poverty in my country.Health insurance is one of the important means to alleviate the impact of disease.According to the data from the establishment and registration of the Poverty Alleviation Office of the State Council,the proportion of the poor due to illness accounted for 42%of the poor population in 2017(Poverty Alleviation Office of the State Council,2017),illness is one of the most important causes of poor people.According to statistics from the National Medical Security Administration,from 2018 to 2020,various medical insurance and poverty alleviation policies have benefited 530 million people from poor people seeking medical care,helped reduce the burden of medical expenses by more than 360 billion yuan,and helped nearly 10 million poverty-stricken families to get rid of poverty.Health insurance has become an important guarantee to prevent urban and rural residents from becoming poverty due to illness and returning to poverty due to illness.On April 15,2019,General Secretary Xi Jinping pointed out that basic medical insurance,critical illness insurance,and medical assistance are important guarantees to prevent people from returning to poverty due to illness.In this context,this article uses theoretical modeling and empirical research to explore the impact of medical insurance on household poverty vulnerability,which is of great significance to the precise design of medical insurance products and the optimization of existing medical insurance models for poverty alleviation.Credit is an important part of China’s current financial poverty alleviation system.General Secretary Xi Jinping emphasized at the symposium on resolving outstanding issues of "two no worries and three guarantees" that it is necessary to explore the establishment of a stable long-term mechanism for poverty alleviation,strengthen industrial poverty alleviation,and make poverty alleviation have a sustainable endogenous motivation.The central and local governments have invested a large amount of funds for poverty alleviation discount loans.As of the end of 2020,a total of more than 710 billion yuan of microfinance for poverty alleviation across the country has been issued,more than 15 million poor households have been supported,a total of668.8 billion yuan has been issued for poverty alleviation,and 9.2 trillion yuan has been issued for targeted financial poverty alleviation loans.Credit poverty alleviation has become an important part of the construction of a long-term poverty alleviation mechanism.In the context of the country’s increased investment in targeted poverty alleviation loans,the theoretical and empirical perspectives of the impact of credit on poverty vulnerabilities are of great significance for the precise design of financial poverty alleviation products and the optimization of existing financial poverty alleviation policies.From 2013 to 2020,the special poverty alleviation funds invested by the central government increased from 38.1 billion yuan to 146.5 billion yuan("Chinese Practice of Human Poverty Reduction" White Paper,2021).The continuous growth of investment in poverty alleviation is one of the important reasons for China’s tremendous achievements in poverty reduction.However,the sustainability of largescale central poverty alleviation investment is uncertain,and sustainable poverty reduction strategies are facing new difficulties and challenges.After 2020,China will enter the development stage of building a well-off society in an all-round way.The antipoverty strategy will mainly focus on consolidating the results of poverty alleviation,alleviating relative poverty,and reducing long-term poverty.Therefore,it is necessary to discuss the long-term poverty reduction effects of poverty reduction policies in response to the new characteristics of poverty.In response to the above situation,this article selects rural households as the research sample,analyzes the role of medical insurance and agricultural credit in reducing household poverty and vulnerability,and tries to solve the following four problems:Firstly,in theory,in the following four situations: no credit and no insurance,credit and no insurance,no credit and insurance,and both credit and insurance,how does the poverty vulnerability of rural households with different capital levels change after being impacted by exogenous diseases? How effective are the poverty reduction effects of medical insurance and agricultural credit for rural households with different capital levels? Does the combination of medical insurance and agricultural credit play a synergistic effect?Secondly,empirically,in the two cases of no serious illness impact and serious illness impact,can increasing the family member’s participation rate reduce the vulnerability of absolute poverty and relative poverty? Is there income heterogeneity in this impact? What are the intermediary channels through which medical insurance affects the vulnerability of poverty?Thirdly,empirically,compared with increasing family members’ participation rate,can agricultural credit as a policy tool reduce household poverty vulnerability? What are the differences in the poverty alleviation effects of the three models of medical insurance,agricultural credit,and "medical insurance + agricultural credit" ? Is it consistent with the results of previous theoretical analysis?Fourthly,from the perspective of long-term poverty reduction,in the three cases of no medical insurance,medical insurance without premium subsidies,and medical insurance with premium subsidies,how will the poverty vulnerabilities and investment decisions of rural households with different asset levels be affected by exogenous diseases? What are the trends in the long-term poverty rate,poverty depth,and longterm poverty reduction costs in the three situations?For the first question,this article refers to the multiple equilibrium theoretical framework of Liao Pu et al.(2019),Liao et al.(2020),and Janzen et al.(2021)to establish a random growth model of household capital,adding agricultural credit and health insurance.This article compares and analyzes the poverty vulnerability of rural households with different capital levels after being impacted by exogenous diseases under the four cases of no credit and no insurance,credit and no insurance,no credit and insurance,and both credit and insurance.This article reveals the poverty reduction effects of medical insurance and agricultural credit for rural households with different capital levels.On this basis,this article further studies the poverty alleviation effect of the combination of agricultural credit and medical insurance.The results of numerical simulation analysis show that: participating in health insurance can effectively reduce household vulnerability to poverty;agricultural credit alone can only reduce household vulnerability to poverty for families with capital near the critical capital level,and has little effect on poverty reduction for other individuals;for families who have just escaped the poverty trap,“health insurance + agricultural credit” has better poverty alleviation effect than health insurance alone;the government can lower the critical capital level by increasing the medical insurance subsidy rate,thereby reducing the poverty population.Regarding the second question,first,this article analyzes the impact of family members’ participation rate on the family’s vulnerability to absolute poverty and relative poverty,and the income heterogeneity of this impact.Secondly,this article further studies the impact of family members’ participation rate on family poverty vulnerability under the impact of severe illness and the income heterogeneity of this impact.Finally,this article uses the mediation effect model to explore the mediation channels of medical insurance’s effect on poverty vulnerability.The results show that improving the degree of coverage can effectively reduce household vulnerability to poverty.However,there is heterogeneity in the effect of poverty alleviation in households with different incomes.The positive impact of improving the degree of coverage on low-income households is much bigger than that of middle and highincome households.This paper further analyzes the impact of improving the degree of coverage on households who suffered from catastrophic medical risks.The results show that improving the degree of coverage can effectively reduce household vulnerability to poverty.In particular,the positive impact of improving the degree of coverage on low-income households is smaller than that of middle and high-income households,which shows somewhat “pro-rich” effect.For vulnerability to poverty calculated based on different absolute poverty standards and relative poverty standards,these conclusions are robust.Moreover,the results show that health insurance reduces poverty by increasing family education and labor training expenditure,and improving the labor health status.For the third question,first,this article analyzes the impact of medical insurance on the family’s vulnerability to absolute poverty and relative poverty.Second,this article explores the impact of agricultural credit on household poverty and vulnerability.Third,this article further analyzes the impact of the "medical insurance + agricultural credit" model on household poverty vulnerability.The results show that health insurance can effectively reduce household vulnerability to poverty.Because the synergy of health insurance and agricultural credit has not been fully utilized,agricultural credit alone and “health insurance + agricultural credit” are ineffective in reducing household vulnerability to poverty.After using the instrumental variable method to solve the endogenous problems of medical insurance and agricultural credit,the results are still stable.For the fourth question,this article refers to the multiple equilibrium theoretical framework of Ikegami et al.(2019)and Janzen et al.(2021),develops a dynamic theoretical model to compare the poverty vulnerability and investment decisions of households with different asset levels in the three cases of government cash subsidy,health insurance and health insurance with premium subsidy and to examine the heterogeneity of this effect among different groups.This article further contrasts and analyzes the impact of government cash subsidy,health insurance and health insurance with premium subsidy on the incidence of long-term poverty,the depth of poverty,and the long-term poverty reduction costs required by different policies.The results show that: health insurance can reduce poverty vulnerability through ex post vulnerability reduction effect and ex ante investment incentive effect;this effect is more significant for individuals near the critical asset level.Medical insurance has both the functions of "preventing poverty" and "reducing poverty".Further,the results show that compared with government cash subsidy,the introduction of health insurance lowers the longterm poverty rate,depth of poverty and costs of long-term poverty reduction.Compared with previous literature,the main innovations of this article are the following three aspects:Firstly,this article constructs a multiple equilibrium model of the random growth of household capital,adding two mechanisms: agricultural credit and medical insurance.This article compares and analyzes the poverty vulnerability of rural households with different capital levels after being impacted by exogenous diseases under the four cases of no credit and no insurance,credit and no insurance,no credit and insurance,and both credit and insurance.This article reveals the poverty reduction effects of medical insurance and agricultural credit for rural households with different capital levels.On this basis,this article further studies the significance of the combination of agricultural credit and medical insurance for poverty alleviation.Secondly,using the China Family Panel Studies(CFPS)data,this article discusses the impact of family members’ participation rate on family poverty vulnerability and the income heterogeneity of this impact from the two dimensions of absolute poverty and relative poverty.Moreover,this article uses the mediation effect model to explore the mediation channels of medical insurance’s effect on poverty vulnerability.Furthermore,using the China Household Finance Survey(CHFS)data,this paper compares the impact of health insurance,agricultural credit and “health insurance +agricultural credit” on household vulnerability to poverty from the two dimensions of absolute poverty and relative poverty.Thirdly,this paper incorporates the medical insurance mechanism into the random growth model of household assets that includes consumption and investment,and compares the poverty vulnerability and investment decisions of households with different asset levels after the impact of exogenous diseases under the conditions of no health insurance and health insurance.In addition,from the perspective of long-term poverty reduction,this article also explores the mechanism of medical insurance for poverty reduction,especially the impact of medical insurance on the intertemporal capital dynamics of vulnerable non-poor families(the marginalized groups of poverty).Finally,this article compares the effects of government cash subsidies and health insurance on the long-term poverty rate,depth of poverty and costs of long-term poverty reduction.