A vast plethora of studies and debates on poverty dynamics talk about debilitating impacts of ill health. Majority of the studies, situated in a developing country context, underlining the economic consequence of ill-health are focused on consumption smoothing (Quintussi, 2015; Sparrow 2014; Khan, 2014).Understanding how households smooth consumption is essential to comprehend the long-term repercussions of adverse health events and to devise apposite policy interventions to ameliorate the catastrophic situation. The present paper studies the conduits of impoverishment in wake of a health shock and contributes to the ever-growing volume of literature via the grandeur of data employed, especially in Indian context wherein not only such studies are few but also nationally representative panel datasets covering these aspects are limited. Specifically, the paper examines impact of ill-health (measured by ADL index, chronic and acute ailments of the head and other members) on labour supply, household assets/livestock holdings, indebtedness, food/non-food consumption and poverty dynamics. The paper further looks into how these results vary across different social and economic classes.
Data & Methods
Indian Human Development Survey panel data set for Round I (2004-05) and Round II (2011-12) has been used. It is a nationally representative survey undertaken by University of Maryland and NCAER. The results are based on cross tabulations, fixed effect linear regression model and Poisson fixed effect models.
The results suggest that the households with head’s having chronic ailment/symptoms or deteriorating ADL index report lower working hours vis-à-vis households with heads having no major illness. The results also show preliminary evidence of intra-household labour substitution when the head is sick. Further, illness of the head, especially in the rural areas renders the household indebted or results in distressed financing, via sale of livestock, in order to seek healthcare. In rural areas, households from lower economic and ethnic group also report major alterations in food and non-food consumption expenditure in times of head's illness. These results are not significant when other members in the household are sick in rural areas while the head is healthy. In urban areas too, the results are similar. Transition into poverty due to a health shock is observed to be higher among lower socioeconomic classes.
This paper is a reflection of the sheer failure of the health policy reforms in India. Despite a spate of micro-health insurance schemes post-2005, the burden of illness and healthcare doesn't seem to ease and the situation for marginalized is even worse, wherein , either the treatment is either not sought or it is not completed due to piling-up induced economic burden. The paper raises a critical yet extremely question that what is more catastrophic for a poor household?-- Inability to seek health care services ultimately resulting in death or selling the only asset to afford medical expenditure and then living a burdensome life throughout? A quick answer to this question is not easy but the very question itself marks the harsh reality of poor households in India.