Determinants of Health Expenditure Among the Informal Workers of India: Is It Always Catastrophic?

Abstract

The Indian labour market is dominated by informal workers. Out-of-pocket healthcare payments are the principal source of healthcare financing for those workers. This article will try to investigate the determinants of health expenditures across heterogeneous groups of informal workers in India based on the 68th round of National Sample Survey data on Employment and Unemployment for 2011–2012. Across different types of informal workers, mean health expenditure has been highest among ‘employees of informal sectors’. The determining factors for the health expenditure are social group, household head and the number of dependencies. It is also found that health expenditure is not always catastrophic among informal workers. The result obtained is that health expenditure has been catastrophic for almost 30% of informal workers across various heterogeneous groups. Using the probit model, the influencing factors responsible for the incidence of catastrophic health expenditure are age and sex of the household head, the number of senior citizens in the family, possession of assets and expenditure on fuel and electricity.