In this paper we review the evidence on the impact of large shocks, such as drought, on child and adult health, with particular emphasis on Zimbabwe and Ethiopia. Our focus is on the impact of shocks on long-term outcomes, and we ask whether there are intrahousehold differences in these effects.
The evidence suggests substantial fluctuations in body weight and growth retardation in response to shocks. While there appears to be no differential impact between boys and girls, adult women are often worse affected by these shocks. For children, there is no full recovery from these losses, affecting adult health and education outcomes, as well as lifetime earnings. For adults, there is no evidence of persistent effects from transitory shocks in our data.
The objectives of the study are three-fold: to investigate who are vulnerable to welfare loss from health shocks, what are the household responses to cope with the economic burden of health shocks and if policy responses like state health insurance schemes are effective in reducing the economic vulnerability. Existing literature have investigated the impact of state health insurance schemes in reducing the vulnerability to financials risks of medical care using catastrophic health expenditure (CHE) measure.
This has several limitations like setting arbitrary threshold levels, exclusion of those that did not seek medical care due to inability to pay and non-accounting for risks posed by different sources of financing. So we use self-reported measure of reduction in economic wellbeing of households due to serious illness or death of one or more members from the recent Young Lives longitudinal study in Andhra Pradesh,