Coping Strategy of Disaster Effect: Intra-Household Labor Substitutionin Indonesia

Abstract

Household with health shocks experience difficulties from the economic burden of morbidity, especially in developing countries. Morbidity will trap time limits for healthy household members, and medical costs increase during illness. Using two waves of 2007 and 2014 household survey data provided by the Indonesian Family Life Survey, this paper provides a comprehensive analysis of intra-household dynamics during periods of health shocks through the mechanisms and effectiveness of household labor substitution to address morbidity shocks. Using the Fixed-Effect household model, we find that natural disasters can affect working hours and household health expenditures. Household can overcome male chronic disease problems through changing labor in the household. Meanwhile, husband have a faster response to health when they are chronically ill for less than 1 year. They would reduce their hours of work and use medical expenditure, but there was no evidence that women would cut back on hours when they were sick. This is because women have multiple responsibilities in the family.