This study assesses the health benefits of better air quality by examining the causal impact of China’s stringent “2+26” regional air pollution control policy on local air quality and population health. Employing a spatial regression discontinuity design that capitalizes on the policy’s location-specific features, we present compelling evidence that the 2+26 policy results in an average reduction of 12.2 units in the local Air Quality Index (AQI) and a 47.0% decrease in per capita medical expenditure from 2014 to 2018. A one-unit reduction in AQI corresponds to a 0.88% reduction in per capita annual medical spending, equivalent to RMB 30.2 (US$4.6). These health gains stem from reduced chronic disease prevalence and improved subjective well-being. Nationally, air quality improvement during 2014–2018 could save RMB 674billion (US$104billion) annually in national direct medical costs, constituting 11.6% of national medical expenditure in 2018. Our findings underscore the substantial health and welfare gains achievable through pollution controls in developing countries.

Rural households contend with numerous uninsured risks that hinder their ability to leverage profitable yet risky opportunities. We study whether the provision of insurance coverage for medical expenditure, one of the most substantial and unpredictable risk, can stimulate entrepreneurship and other risky financial decisions among rural households. We leverage the progressive nationwide rollout of a universal public health insurance program in rural China. We find that the introduction of health insurance led to a substantial increase in rural households engagement in entrepreneurship. This increase is mainly driven by the risk sharing of health insurance, rather than a reduction in realized medical expenses. The entrepreneurship-promoting effect is also evident at an aggregate level, fostering the growth of smallholder businesses in rural counties. Our findings shed light on the understudied, favorable impact of health insurance on household’s risk taking in rural markets of developing countries.

As industrial automation supplants labor, there are important consequences on the labor market, especially for the vast rural population in developing countries. This study investigates how industrial automation, particularly the use of robots, affects the employment and mobility of young rural workers and the decision-making of their elderly parents in China. Using longitudinal data from rural Chinese households and a shift-share approach, we find automation in urban areas decelerates the rural-to-urban migration. This slowdown is accompanied by a reduction in rural workers' employment opportunities and an increase in their propensity to co-reside with their elderly parents in their home counties, which in turn alters their parents' financial decisions, including labor supply, savings, and family transfers. Notably, rural workers' decision to stay and co-reside with their senior parents fosters more frequent family interactions, contributing to notable improvements in the elders' mental and physical health. Our study underscores the complex effects of automation on labor mobility, family relationships, and the overall well-being of the rural populace in the face of technological advancements.