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Household disability costs and living standards in Turkey: evidence from a health reform

Ozdamar, Oznur and Giovanis, Eleftherios and Samuk, Sahizer (2020) Household disability costs and living standards in Turkey: evidence from a health reform. International Journal of Social Economics. ISSN 0306-8293

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Abstract

Purpose In this study, we attempt to estimate the disability costs of households employing the Standard of Livings (SoL) approach and evaluate the impact of the Universal health system reform implemented in Turkey in 2008. Design/methodology/approach We apply a Structural Equation Modelling (SEM), which simultaneously estimates the disability and living standard equations, including unobserved latent variables. Moreover, we apply a difference-in-differences (DiD) framework to investigate the impact of the universal health insurance (UHI) system and the Green Card programme on living standards. The empirical analysis relies on data derived from the cross-sectional Household Budget Surveys (HBS) during the period 2002–2013. Findings Our findings suggest a negative and significant impact of disability on SoL, where disability costs reach the 23% of the household income, which is equivalent almost to $2,600 (USD). Furthermore, the disability costs are reduced from $4,450 to $2,260 due to the UHI and the Green Card programme. Research limitations/implications A major limitation of the study is the data structure, which is based on repeated cross-sectional surveys. By using panel data, it is possible to follow the same individual across time and to implement panel data models to control for unobserved heterogeneity and omitted-variable bias. Social implications Disability has adverse effects on living standards. The estimation of the disability-related costs may provide a useful guide on policy planning and the design of social benefits. Originality/value The contribution of this paper is that it is the first study estimating the disability-related costs in Turkey. Furthermore, the contribution lies in the investigation of the 2008 health reform and the Green Card programme and its impact on disability costs.

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