In 2002, the Mexican government began an effort to improve health
access to the 50 million uninsured in Mexico, a program known as
Seguro Popular (SP). The SP offered virtually free health insurance
to informal workers, altering the incentives to operate in the formal
economy. We find that the SP program had a negative effect on the
number of employers and employees formally registered in small and
medium firms (up to 50 employees). Our results suggest that the positive gains of expanding health coverage should be weighed against the implications of the reallocation of labor away from the formal sector.
Bosch, Mariano, and Raymundo M. Campos-Vazquez.
"The Trade-Offs of Welfare Policies in Labor Markets with Informal Jobs: The Case of the "Seguro Popular" Program in Mexico."
American Economic Journal: Economic Policy,
Informal Economy; Underground Economy
Health Insurance, Public and Private
Health: Government Policy; Regulation; Public Health
Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs
Informal Labor Markets
Economic Development: Human Resources; Human Development; Income Distribution; Migration
Formal and Informal Sectors; Shadow Economy; Institutional Arrangements