Health insurance and self-employment transitions in Vietnam

Abstract

Health insurance can have important effects on self-employment and selfemployment transitions. However, there is a literature gap on the relationship between health insurance and self-employment in low and middle income countries, especially in the context of rapid expansion of health insurance in these countries. This paper examines this relationship in Vietnam with a focus on the comparison between the voluntary scheme for the informal sector (mostly self-employed workers) and the compulsory insurance for the formal sector (mostly wage workers). We employ a Probit model with selection on a panel from the Vietnamese Household Living Standards Surveys 2010-2014 to investigate the association between health insurance and self-employment entry and exit. We show that those with compulsory health insurance in Vietnam, the formal workers, are 10 percentage points less likely to enter self-employment compared to those having voluntary insurance. Regarding self-employment exit, people with compulsory insurance are more likely to exit selfemployment compared to those covered by voluntary insurance. However, the effect size is relatively small.

Transitional entrepreneurship: Elevating research into marginalized entrepreneurs

“…Amoako et al (2021) discuss how transitional entrepreneurs use personal trust and sociocultural norms to build trade credit relationships to support the growth of new ventures so challenged. Further, Leopold et al (2021) shine a light on an often-overlooked institution: healthcare. In many countries, citizens take for granted that healthcare is available to all, but in others transitional entrepreneurs face hard choices based on their ability to secure and afford health insurance.…”