Does social health insurance relieve health inequalities among minors?

PENG Xiaobo1 WANG Tianyu2

(1.School of Economics, Central University of Finance and Economics 100081)
(2.School of Labor and Human Resources, Renmin University of China 100872)

【Abstract】Armed with the longitudinal data from China Health and Nutrition Survey, this paper examines the causal relationship between the roll-out of the New Rural Co-operative Medical Scheme (NCMS) and health inequalities among children in rural China. Although health condition of the covered children has been improved, the NCMS is still a source of the rise of health inequalities among children measured by the concentration index, and its contribution increases as time goes by. Evidence about the inequity in health service delivery shows that the probability for 1/4 of the richest having access to preventive health care is 40% higher than that for 1/4 of the poorest, to which the NCMS contributes about 18%. Theoretical analysis and numerical simulation show that increment of health care consumption increases with wealth, indicating that the wealth effect is magnified by the NCMS. Our research provides some evidence for the phenomenon that the NCMS increases the gap among children’s health and suggests improving NCMS so as to prevent it from enlarging health inequalities among people of different incomes.

【Keywords】 health inequalities; New Co-operative Medical Scheme; decomposition of the concentration index ;


【Funds】 Youth Foundation of Humanities and Social Sciences Foundation of the Ministry of Education (17YJC790116) Key Program of National Social Science Foundation of China (13&ZD042) Youth Program of National Natural Science Foundation of China (71703006)

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    [1]. ① Many studies have proved that infancy, as a key period in one’s life, has very important influence on their later health, employment, income, and marriage (Currie, 2011). Research on inequality in the group and early intervention have key theoretical and practical significance in avoiding the solidification of social mobility and weakening intergenerational relevance, which meets the policy conception of WHO in “closing the gap in a generation” (CSDH, 2008). [^Back]

    [2]. ① The health indexes have been used to measure child mortality, child immunity, child malnutrition, adult health, medical subsidy, use of medical services, and so on. [^Back]

    [3]. ① For example, the contribution of maternal education to children’s health CI can be decomposed into the change of education CI times the elasticity of education towards health, and the change of elasticity of education towards health times education CI in the last period. [^Back]

    [4]. ② It is because that the old scheme gradually collapsed with the removal of rural household contract responsibility system in the 1980s and 1990s, and the new scheme was piloted from 2003 and got greatly promoted later. Therefore, examining the samples during the years around the start of NCMS may help better analyze the effect of NCMS on the members’ health and health inequalities. Since NCMS had achieved full coverage in 2011, it is insignificant for the identification to add data of 2011. [^Back]

    [5]. ③ The measurement standard for children aged zero to two is, more exactly, length-for-age. [^Back]

    [6]. ④ The conclusion reached with HZA as the explained variable does not change. [^Back]

    [7]. ⑤ In the research, there are four observed values when HAZ is not -6 and 6. The analysis results containing the four observed values are consistent with those shown in the main body, and are not reported due to space limitation. [^Back]

    [8]. ① Due space limitation, Table 1 reports only the sample statistics of the explained variable and the key explanatory variable, namely joining NCMS or not. For the description of other control variables, please check the published appendix on the website of China Industrial Economics ( [^Back]

    [9]. ② See WANG, H. and Pu, J. China Food and Nutrition Development Program (2014–2020) pointed out that by 2020, the stunting prevalence of children under five will be controlled below 7% in China. [^Back]

    [10]. ① It is noteworthy that whether or not a community implements NCMS is also a binary variable, and using one binary variable as the IV of another leads to local average treatment effects (LATE). In addition, identification difficulty may be caused by weak variation of multiple binary variables. To solve those possible problems, this paper treated the proportion of communities joining NCMS as the IV to make the variable continuous. Regression results are similar to the above, without the problem of weak IV. [^Back]

    [11]. ① Due to space limitation, it was not reported in the body of this paper. For details, please check the published appendix on the website of China Industrial Economics ( [^Back]

    [12]. ① The descriptive results of samples show that in 2004 the family income of residents joining NCMS was significantly higher than that of residents not jointing NCMS. [^Back]

    [13]. ② The sample data show that the income of families joining NCMS was lower than that of families not joining NCMS in 2006 and 2009. [^Back]

    [14]. ① Source: Documents of opinions on establishing New Rural Co-operative Medical Scheme, opinions on consolidating and developing the New Rural Co-operative Medical Scheme (2010), progress of the New Rural Co-operative Medical Scheme in 2011 and priority in 2012, Notice of the Ministry of Finance, the National Health and Family Planning Commission and the Ministry of Human Resources and Social Security on Enhancing the Standards for Raising the Funds of the New-Type Rural Cooperative Medical Insurance and the Basic Medical Insurance for Urban Residents in 2014 (No. 14 [2014] of the Ministry of Finance ). [^Back]

    [15]. ② Source: The document about national final accounts of social security fund; China Financial Yearbook (2011–2013); and National Government Final Accounts (2011–2013). [^Back]

    [16]. ① For detailed deviation and interpretation in the part, see the published appendix on the website of China Industrial Economics ( [^Back]

    [17]. ① It is equivalent that the real ceiling is CNY 100,000, which is in line with the reality. For example, it is set as CNY 100,000 by the notice on issuing the comprehensive management and implementation proposal on the basic health insurance for urban and rural residents in 2014. [^Back]


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This Article


CN: 11-3536/F

Vol , No. 12, Pages 59-77

December 2017


Article Outline



  • 1 Introduction
  • 2 Measurement and decomposition of health inequalities
  • 3 Data and descriptive statistics of samples
  • 4 Empirical results
  • 5 Analysis on mechanism of NCMS aggravating health inequalities
  • 6 Conclusion
  • Footnote