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Kalyan Kolukuluri

Title: Adverse health shocks, social insurance and household consumption: evidence from Indonesia’s

Askeskin program

Journal: International Journal of Health Economics and Management

This study examines the efficacy of Askeskin, a subsidized social health

insurance targeted towards poor households and informal sector workers in
Indonesia, in mitigating the impact of adverse health shocks on household

consumption. To overcome selection bias from non-experimental nature
of Askeskin enrolment, I use a robust estimation strategy, where outcome

regressions are run on a propensity score-based matching sample. Using
longitudinal data from the Indonesia Family Life Survey, this study finds that

uninsured households facing extreme health health shocks experience a
1.3% point loss in growth in food and 2% point loss in non-food consumption
growth. Importantly, households having Askeskin

insurance, are fully insured in terms of food and medical

consumption. But non-food spending, a discretionary
component, is not insured fully resulting in a 1.2% point
fall in consumption growth rate, despite Askeskin. This

result is robust to a battery of sensitivity and robustness

checks, including alternate definition of health shocks.
Further, I investigate whether the Askeskin program simply
displaced informal, community-based mechanisms of

risk sharing. No crowd out effect is observed and informal

risk-sharing coexists with Askeskin.

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