Impact of national health insurance enrolment on farm investments in Sub-Saharan Africa: empirical evidence from Ghana

Abstract

Purpose

The study aims to explore the impact of National Health Insurance Scheme (NHIS) enrolment on farm investments in a developing country setting. We classify farm investments into (1) soil and land investments and (2) hired adult labour.

Design/methodology/approach

This study used data on 5,883 farm households from the sixth round of the Ghana Living Standard Surveys (GLSS), which is nationally represented data at the household level. The data also includes a Labour Force Survey module. The sample frame was divided into a primary and secondary sampling unit, with interviews taking place in 1,200 enumeration areas (EAs). The estimation of impacts was carried out using ordinary least squares (OLS) estimations and addressed endogeneity concerns using propensity score matching (PSM) and instrumental variable (IV) estimators.

Findings

The study finds a strong positive association between the NHIS enrolment status of farm households and investments in agricultural land and soil health improvement. Precisely, farm households who are enroled in the health insurance system tend to invest about 32% more in soil and land improvement activities and 30% more in hired farm labour than households who are not enroled in NHIS.

Practical implications

The overall evidence from our study suggests that instead of high investments in fertilizer and other input subsidy programmes in Africa, sustainable smallholder agricultural investments can be achieved if concerns and issues of farmers’ health coverage are adequately addressed.

Originality/value

This is one of the first papers that have explored the impact of NHIS in developing countries on farm investments.

Citation

Asiedu, E., Sowah, D. and Karimu, A. (2024), "Impact of national health insurance enrolment on farm investments in Sub-Saharan Africa: empirical evidence from Ghana", Agricultural Finance Review, Vol. 84 No. 4/5, pp. 320-341. https://doi.org/10.1108/AFR-03-2024-0041