Do Health Insurance Schemes Heterogeneously Affect Income and Income Distribution? Evidence from Chinese Agricultural Migrants Survey

Currently, the particularity of Chinese agricultural migrants groups determines that they can participate in various types of public health insurance schemes, i.e., the New Cooperative Medical Scheme (NCMS), Urban Residents Basic Medical Insurance (URBMI), and Urban Employees Basic Medical Insurance (UEBMI). The goal of this paper is to shed light on whether and how these health insurance schemes affect the agricultural migrants’ income and income distribution. A dataset of 86,660 individuals is obtained from China Migrants Dynamic Survey implemented by the National Health Commission. The study uses the basic ordinary least squares regression to assess association between health insurance schemes and income and uses the propensity score matching method to estimate the income effect. In addition, we further use the quantile regression method to explore heterogeneous effects of health insurance schemes on income distribution. We find that UEBMI and URBMI have significant increased monthly net income of agricultural migrants, while NCMS does not. The income-increasing effect of UEBMI is greater than that of URBMI. The income-increasing effect of UEBMI is most obvious in the low-income group. While URBMI has a significant role in increasing income with its income-increasing effect being obvious for the lowest and highest income groups. We suggest that China’s health insurance system needs further reforms in order to reduce income inequality of agricultural migrants.