1 Child Health Insurance and Household Labour-Related Outcomes: An Experiment from the Central Philippines Dean Gerard Dulay & Miguel Garcia Barretto Barccelona GSE & Universitat Pompeu Fabra I. INTRODUCTION How does health insurance targeted to young children affect the labor supply decisions, wages, borrowing and income of their low-income parents? We use experimental data (henceforth QIDS data) collected from 2005-2010 in the Central Philippines, where randomly selected district hospitals were given an ȃaccessȄ intervention Ȯ which provided all children of randomly selected treatment households 5 years of age and below with 100% Medical Insurance over a period of 3 years, from 2005 Ȯ 2008. We first discuss the literature on children’s health, health insurance and labor supply. We also address how our study contributes to this literature. The current relevance that policymakers attach to expanding and improving health care coverage of children and the poor in both developed and developing countries has been justified by recent academic work on the impacts of early health insults and restrictive budget constraints on current and future health related and socioeconomic characteristics of these children. Godfrey & Barker (2000) find that early life health has consequences on old age chronic disease, while Almond (2006) finds effects of health in early life on wages in later life. School attainment of sicker children compared to that of less sick children might also be lower through reduced school participation and reduced cognitive development (Case & Paxson, 2008). This may result lower productivity and wages in later life (Maccini & Young, 2009; Bleakley, 2007). On the other hand, Case & Paxson (2008) have found intergenerational consequences. Shorter women tend to give birth to smaller children, an intergenerational trap where the effects of malnutrition in the mother exhibit persistence across generations. Also, poor people are less likely to obtain adequate medical care because of very restrictive budget constraints. One way that policymakers have sought to improve the quality of health services and expand its access amongst the most vulnerable was to introduce nationwide health insurance programs. Currie and Gruber (1996) and Hanratty (1999) have found that increased use of health insurance reduced the use of medical services among children and reduced child mortality. Examining the Philippines using our dataset, Quimbo et. al. (2008) find that children who are introduced to the treatment are less likely to be wasted and CRP Ȯ Positive. Now we turn to the robust literature on health insurance, Gruber and Madrian (2004) survey over 90 papers on health insurance, labor supply and job mobility and draw several empirical regularities from their appraisal of the existing literature. We expound on their relevant points here. First, work on the relationship between dependents’ labor force entry decision and health insurance has been studied extensively. Buchmueller and Valleta (1999) and Schone and Vistnes (2000) show that the introduction of health insurance decreases the probability of said dependent working in a full time job with health insurance, increases the probabilities of the dependent working in a full time job without health insurance and a part time job. These papers, along with Olsen ǻŗşşŞǼ show that health insurance reduces dependents’ labor force participation rate. This result holds in the context of a developing country, Taiwan, where Chou and Staiger (2001) estimate that the introduction of the Taiwanese government of health insurance led to a decrease in the labor participation rate of married women. All in all,