The Implication of Health Insurance for Child Development and Maternal Nutrition: Evidence from China

We use the implementation of the new rural cooperative medical scheme (NCMS) in China to investigate the effect of health insurance on maternal nutrition and child health. Given the uneven roll-out of the NCMS across rural counties, we are able to deploy its implementation as a natural experiment in order to obviate problems of adverse selection that typically plague research on the effects of health insurance. We find that, among children, the NCMS has the greatest positive effect on infants between birth and 5 years of age. Also, with respect to female nutritional status, our models show that the NCMS has the greatest effect on women of childbearing age (aged between 16 and 35), indicating that women who benefit from the NCMS benefits may, in turn, give birth to healthier babies. Thus, taken together, our findings indicate that the NCMS plays an important role in health dynamics in rural China.