@article {32736,
	title = {The consequences of health shocks on households: Evidence from China},
	journal = {China Economic Review },
	volume = {79},
	year = {2023},
	abstract = {Unexpected health shocks may bring catastrophic consequences for households. This paper examines the effect of unexpected adverse health shocks on household members{\textquoteright} physical and mental health, labor supply, household income and asset, and health behaviors in China by analyzing two nationally representative datasets and adopting a difference-in-differences method augmented with coarsened exact matching. We find that an unexpected health shock results in a discounted out-of-pocket medical expenditure of 16,943 RMB (US$ 2647) over five years for an average household, a reduction of household income per capita of 841 RMB per year (US$ 131, or 6.0\% of household annual income per capita), and a loss of net household asset per capita of 13,635 RMB (US$ 2130, or 9.7\% of household asset per capita). It raises the probability of an average household applying for public poverty relief allowance by 2.8 percentage points. In addition, we document a strong intra-household\&nbsp;spillover effect\&nbsp;of health shocks on mental health and health behaviors. A simple back-of-envelope calculation shows that the health shock induces a private cost of 34,966 RMB (US$ 5463) over 5\&nbsp;years for an average household, and incurs a social financial burden of 6066 RMB (US$ 948) in 5\&nbsp;years per household in medical reimbursement and social welfare transfers. At a national scale, the total social burden of health shocks from cardiovascular and cerebrovascular diseases amounts to 1.1 trillion RMB (US$ 172.1 billion) over 5\&nbsp;years.},
	url = {https://www.sciencedirect.com/science/article/pii/S1043951X23000548?via\%3Dihub},
	author = {Yajie Wang;  Zhenjie Jin; Ye Yuan}
}
