How Do Health and Social Insurance Programs Affect the Land and Labor Allocations of Farm Households? Evidence from Taiwan

Using a unique dataset of 703,287 farm operators from the Taiwanese Census of Agriculture merged to administrative records from the National Farmers' Health Insurance (FHI) program, we examine the effects of the enrollment in the FHI program on farmers’ on- and off-farm labor supply and the amount of land they allocate to Taiwan’s land retirement program. In order to account for non-random self-selection into the FHI we use a matching procedure to estimate the impact of the program on land and labor allocations. Our results indicate that participation in the FHI increases (decrease) on (off) farm labor supply, and decreases the amount of land enrolled in the land retirement program. Our findings have implication for health care reforms that have been initiated in other countries, and the United States in particular.