The impact of long-term and short-term health shock on the labour supply and labour income of migrant workers in China: the mediating role of medical insurance

ABSTRACT

Using national data from China Labour-force Dynamics Survey (CLDS), we apply Heckman two-step model and instrumental variable method to analyse the impact of long-term and short-term health shock on the labour supply and labour income of migrant workers as well as the mediating effect of medical insurance. Results indicate that both long-term and short-term health shock significantly reduce the labour supply and labour income of migrant workers. In particular, the negative effect of short-term health shock on labour supply proves greater than that of long-term health shock, and the negative effect of long-term health shock on labour income proves greater than that of short-term health shock. Medical insurance mitigates the negative effect of short-term health shock on the labour supply and labour income of migrant workers, yet produces no remarkable mediating effect on migrant workers who suffer from long-term health shock.

KEYWORDS:

• Health shock
• migrant workers
• labour supply
• labour income
• medical insurance

JEL CLASSIFICATION:

• J22
• J61

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This research was funded by Social Science Planning Fund of Liaoning Province (Grant Number: L20BGL004) and the Fundamental Research Funds for the Central Universities (Grant Number: N2114001).