Endogenous health risks, poverty traps, and the roles of health insurance in poverty alleviation

Abstract

Background Family education investment is a key factor in reducing intergenerational transmission of poverty. At the price of higher health risk, the poor may overdraw their bodies to earn more money to invest in education. This study investigates the effect of physical overdraft, health risks and health insurance on poverty and economic growth. Methods This paper proposes an economic development model of endogenous health risks and poverty by setting up a physical overdraft decision. Furthermore, we introduce mutual health insurance mechanism to analyze its poverty alleviation effects. Results First, this study shows that health risks weaken the economy and are among the leading causes of poverty. Second, mutual health insurance can alleviate, but not completely eliminate, the negative impact of health risks on the economy. Third, appropriate health insurance arrangements can lift some or even all poor households out of poverty. Conclusion Health risks have a significant effect on poverty. Furthermore, health insurance mechanisms have the advantages of transferring health risks, reducing poverty and improving health equity.

Impact of Human Capital on Poverty Reduction in Pakistan

“…A healthy person can utilize the working age more effectively. This result is consistent with previous research (Sajid Ali, Sharif Chaudhry, & Farooq, 2012;Liao et al, 2022). It proves that a person leading a healthy lifestyle has more chances to alleviate poverty (Amin, 2012).…”

“…Health, Education, and income are considered to be the most important factors for human development (Afzal, Farooq, Ahmad, Begum, & Quddus, 2010;Oforegbunam & Okorafor, 2010). Improvement in these factors enables the country to get rid of poverty and provide equal human Rights (Gyimah-Brempong & Wilson, 2004;Liao, Zhang, & Zhang, 2022). Although Physical fitness in the form of human capital contributes to economic development, most empirical studies identify physical fitness narrowly with education (Sunde & Vischer, 2015).…”

Medical insurance, vulnerability to poverty, and wealth inequality

“…The positive correlation between health risks and household poverty has been discussed in several studies ( 1–3 ). Using household survey data from China, Song et al ( 3 ) and Ma et al ( 4 ) found that health risks are a direct factor leading to poverty vulnerability in households.…”

“…Using household survey data from China, Song et al ( 3 ) and Ma et al ( 4 ) found that health risks are a direct factor leading to poverty vulnerability in households. Liao et al ( 1 ) discovered that under the impact of health risks, increased household medical expenses lead to reductions in total household capital, total labor, and per capita capital, ultimately plunging households into poverty. Moreover, health risk shocks also generate health inequality and health poverty issues ( 2 , 5 ) and can lead to the intergenerational transmission of household poverty ( 6 , 7 ).…”

Health Risk, Income Effect, and the Stability of Farmers’ Poverty Alleviation in Deep Poverty Areas: A Case Study of S-County in Qinba Mountain Area

“…The impoverished mostly behave with low ability and less capable ways and suffer from disproportionate health risks, yet generally have less or no access to better health care [ 14 , 16 ]. As yet, many research studies have found and focused on the poverty-health nexus [ 23 ], driven by ill-health and poverty trap [ 24 , 25 , 26 ], the vicious cycle of poverty and ill-health [ 27 , 28 ], ecosystem poverty and interaction of health [ 29 , 30 ], and medical poverty trap [ 31 ]. Nevertheless, many research studies empirically investigated the association between poverty and ill health status, while few explored the connection between poverty and health-income-place.…”