Influences of Public Medical Insurance System on Labor Health Status and Supply

The emergence of COVID-19 in 2020 has brought dramatic impacts to the global economy. The resulting health crisis and widespread fear have triggered labor shortage problems such as high job vacancy rate and low labor participation rate. Thus, how to increase the labor supply has become a hotspot among scholars. We aimed to analyze the influences of public medical insurance system on labor health status and supply.

Using the China Health and Nutrition Survey five-phase panel data, the new rural cooperative medical system was taken as an example to empirically analyze the influences of public medical insurance system on the individual health status and labor supply via the panel Tobit model and panel binary Logit model. The analysis revealed the mediating effect of health status.

First, Public medical insurance system could significantly improve individual health status. Second, public medical insurance system will lengthen the labor supply time and elevate the labor supply rate by improving individual health status. Third, the influences of public medical insurance system on labor health status and supply vary with gender and age.

Public medical insurance system will generate positive influences on labor health status and labor supply. Hence, perfecting the public medical insurance system is able to mitigate the negative impacts of population aging and pandemic on the labor supply.