Liquidity constraints, cash transfers and the demand for health care in the Covid‐19 pandemic

Abstract

In the last decade, we observed four pandemics emerge throughout the world, which posed considerable risk to individuals and substantial challenges to governments. In this paper, we examine the existence of "liquidity sensitivity" behavior in the most recent pandemic (COVID-19), that is, whether sick individuals delay healthcare consumption due to lack of income and access to credit markets.Consider, for instance, an informal worker who depends on their daily earnings to provide for their family. Even if they are infected, the lack of income might prevent them from searching the healthcare system. This behavior might not only aggravate the individuals' disease but also increase the probability of them infecting others.We evaluate this hypothesis in the context of the Emergency Aid (EA) program in Brazil, a large cash transfer program undertaken during the COVID-19 pandemic. We evaluate if the program, that increased beneficiaries' liquidity, affected their healthcare consumption either by increasing COVID-19-related hospitalizations or decreasing the lag between becoming ill and accessing the healthcare system.To test this hypothesis, we take advantage of the fact that different birth cohorts received the transfer on different days and that the transfer should increase beneficiaries' healthcare consumption immediately if they are liquidity constrained. We exploit these factors by implementing a regression discontinuity in time (RDiT) design.

Impact of a pandemic shock on unmet medical needs of middle-aged and older adults in 10 countries

“…On the other hand, in response to a sudden outbreak of a new infectious disease, countries and regions have been experimenting and changing their coping strategies, such as some emergency measures such as community closure, traffic control and social distancing to prioritise the response to the spread of the pandemic. Some of the countries analysed in our study also adopted such strategies such as the stay-at-home orders in Singapore,40 which may not only lead to active or passive changes in daily life behaviour and social interaction but also undoubtedly reduces the accessibility of medical services resources, especially in cross-regional medical treatment 41. This is particularly evident among middle-aged and older adults, who may put on hold non-acute or urgent medical needs.…”

“…Some of the countries analysed in our study also adopted such strategies such as the stay-athome orders in Singapore, 40 which may not only lead to active or passive changes in daily life behaviour and social interaction but also undoubtedly reduces the accessibility of medical services resources, especially in cross-regional medical treatment. 41 This is particularly evident among middle-aged and older adults, who may put on hold non-acute or urgent medical needs. In contrast, the impact of the pandemic and social distance can have a significant negative impact on the physical and psychological well-being of older adults.…”

Entrepreneurship Research in Times of COVID-19: Experiences from South America

“…According to studies, tailored policies and actions are needed to help these groups and alleviate the economic and social repercussions of the epidemic. Researchers have investigated the efficacy of different initiatives, such as cash transfers and food aid, in decreasing poverty and promoting economic resilience [67][68][69][70][71].…”