Socio-Economic Differentials in Impoverishment Effects of Out-of-Pocket Health Expenditure in China and India: Evidence from WHO SAGE

Background and Objectives

The provision of affordable health care is generally considered a fundamental goal of a welfare state. In addition to its role in maintaining and improving the health status of individuals and households, it impacts the economic prosperity of a society through its positive effects on labor productivity. Given this context, this paper assesses socioeconomic-differentials in the impact of out-of-pocket-health-expenditure (OOPHE) on impoverishment in China and India, two of the fastest growing economies of the world.

Data and Methods

The paper uses data from the World Health Organisation’s Study on Global Ageing and Adult Health (WHO SAGE), and Bivariate as well as Multivariate analyses for investigating the socioeconomic-differentials in the impact of out-of-pocket-health-expenditure (OOPHE) on impoverishment in China and India.

Results and Conclusions

Annually, about 7% and 8% of the population in China and India, respectively, fall in poverty due to OOPHE. Also, the percentage shortfall in income for the population from poverty line due to OOPHE is 2% in China and 1.3% in India. Further, findings from the multivariate analysis indicate that lower wealth status and inpatient as well as outpatient care increase the odds of falling below poverty line significantly (with the extent much higher in the case of in-patient care) due to OOPHE in both China and India. In addition, having at least an under-5 child in the household, living in rural areas and having a household head with no formal education increases the odds of falling below poverty line significantly (compared to a head with college level education) due to OOPHE in China; whereas having at least an under-5 child, not having health insurance and residing in rural areas increases the odds of becoming poor significantly due to OOPHE in India.