The Research On The Relationship Between Health Investment And Rural Poverty

During the past twenty years, China has achieved a great success in reducing the number of poverty people from 250 billion in 1978 to 28.2 billion in 2002, reducing 9.24% per year. But we can also find that in recent years this process has slowed down. Meanwhile, the causes of rural poverty have changed. To rural people, disease becomes the major factors to make them poverty.Using the 2004 wave of China Health and Nutrition Survey, we investigate the relationship between health and individual income. We find that individual health status impacts his(her) income significantly, and the economic return to health is substantially higher for the rural population than for the urban population; we also find that individual health status has an negative effect to the probability of becoming poor.The much better off urban residents are more or less the sole gainers of subsidies, while the rural majority are excluded. These findings can be used as arguments for changes in the profile of subsidies to the health care sector: If rural China particularly the western poverty region would receive a larger proportion of the subsidies, it would improve poor people's health and human capital investment, then reduce the number of poor people.