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Project Description

Summary:  View help for Summary In 2002, the Mexican government began an effort to improve health access to the 50 million uninsured in Mexico, a program known as Seguro Popular (SP). The SP offered virtually free health insurance to informal workers, altering the incentives to operate in the formal economy. We find that the SP program had a negative effect on the number of employers and employees formally registered in small and medium firms (up to 50 employees). Our results suggest that the positive gains of expanding health coverage should be weighed against the implications of the reallocation of labor away from the formal sector.

Scope of Project

JEL Classification:  View help for JEL Classification
      E26 Informal Economy; Underground Economy
      I13 Health Insurance, Public and Private
      I18 Health: Government Policy; Regulation; Public Health
      I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
      J46 Informal Labor Markets
      O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
      O17 Formal and Informal Sectors; Shadow Economy; Institutional Arrangements


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