Does Social Health Insurance Help Owners of Micro- and Small Firms Cope with Family Hardships? Evidence from Indonesia

Micro- and small firms lack access to external finance and the labour market so that they are vulnerable to family hardships experienced by the owners such as deaths or sickness of family members. The literature is thin on how these firms cope with family hardships, in particular on whether owners’ access to social health insurance helps. We examine whether a social health insurance in Indonesia, Askeskin, protects owners of micro- and small firms against family hardships. We find some evidence Askeskin reduces the adverse effects of recent deaths in the family, outpatient care, and traffic accidents on net profits; Askeskin also protects the firms’ assets against owners’ outpatient care need. Social health insurance may, therefore, improve micro- and small firms’ survival, which (because most people in developing countries’ labour markets work in micro- and small firms) helps governments’ efforts to eradicate poverty.