Informal payments and intra-household allocation of resources for health care in Albania

Abstract

Background: Informal payments for health care services can impose financial hardship on households. Many studies have found that the position within the household can influence the decision on how much is spent on each household member. This study analyses the intra-household differences in spending on informal payments for health care services by comparing the resources allocated between household heads, spouses and children.

Methods: Pooled data from two cross sectional surveys, the Albanian Living Standard Measurement Survey 2002 and 2005, are used to analyse both the probability and the amount paid in inpatient and outpatient health care services. A generalised Hausman specification test is used to compare the coefficients of probit and OLS models for nuclear and extended households.

Results: We find that due to the widespread informal payments there are no significant differences between households in the incidence of informal payments for households' members, but there are more differences in the amount paid informally. Results suggest that households strategically allocate their resources on health care by favouring individuals with higher earning potential who have invested more in human capital. Extended households pay higher amounts for spouses with higher education compared to nuclear households. On the other hand, nuclear households choose to pay higher amounts for children with a higher level of education compared to extended households.

Conclusions: The differences between households should be taken into account by public policies which should compensate this by redistribution mechanisms targeting disadvantaged groups. Governments should implement effective measures to deal with informal patient payments. JEL Codes: I10, I19, D10.