Crowding out of Solidarity ? – Public Health Insurance versus Informal Transfer Networks in Ghana

This paper delivers empirical evidence on how informal transfers are aff ected by a formal and country-wide health insurance scheme. Using the fi fth wave of the Ghanaian Living Standard Household Survey, we investigate the extent to which the exogenous implementation of the National Health Insurance Scheme aff ects the probability of making or receiving informal transfers and their monetary equivalents. Our fi ndings suggest that there is a signifi cant crowding out of informal transfers. Members of weak transfer networks and individuals that run an enterprise are inclined to reduce their amount of remittances. We conclude that the provision of formal health insurance can reduce covariate risk in weak transfer networks and support business owners that are confronted by strong sharing obligations. JEL Classifi cation: I13, I15, O12