Association for Public Policy Analysis & Management

Health shocks can have significant consequences for human capital of future generations in countries with a poor system of health insurance. Access to health insurance may not only play a role in determining school expenditure but the differential enrollment of boys versus girls. Using two rounds of nationally representative survey data, the paper examines the impact of a cashless, paperless and portable health insurance scheme called the Rashtriya Swasthya Bima Yojana (RSBY) launched in 2008 in India, on schooling decisions and gender differences in education. Employing difference-in-differences and triple differences approach, the paper finds that access to RSBY is beneficial for child education as school expenditure increases after the treatment. Additionally, RSBY is found to be relatively more advantageous to girls as it reduces the existing gender gap in school enrollment. Robustness checks and sensitivity analyses support the validity of the results.