Household Income and Consumption Consequences of Death and Illness : Evidence from Ethiopia

This paper discusses the effects of death and illness on household income and non-health consumption for all and different subsamples of households in Ethiopia. With a few exceptions, the results suggest that the insurance mechanism in the country does not fully insure household income and consumption against death and illness. The results show that, after experiencing death and/or illness, almost all household groups suffer from a decrease in consumption of one or more items and/or earned income. As to policy implication, it is time to expand the existing community-based health insurance and start operation of the legislated social health insurance program. Complementing these insurance programs with a mechanism that incentives death affected households with school-aged children not to withdraw their children out of school could help reduce the negative consequence of death on education