Health shock, the Green for Grain Program and medical expenses: Empirical Evidence on the well-being of Chinese Farmers

Health shock is an important factor affecting the medical expenditure of farmers. As the largest environmental compensation project in China, the Green for Grain Program plays an important role in increasing the well-being of farmers. Based on the 2017-2019 China Household Finance Survey (CHFS) dataset, this paper constructs two balanced panel data, which adopts the differences-in-differences propensity score matching (PSM-DID) from the perspective of post-hoc. The method identified the effect of health shock on the level of household medical expenditure in peasant household. The findings suggest that health shock have significantly increased the level of medical expenditure in peasant household, and this conclusion remains true after a series of robustness tests. Specifically, the health impact can significantly increase household medical expenditure by 2270 RMB yuan. Further research found that the impact is significantly heterogeneous due to whether farmers participate in the Green for Grain Program. Specifically, under the impact of health shock, the increased amount of medical expenditure of farmers participating in the Green for Grain Program is relatively small, that is, there is a "well-being paradox'' phenomenon. Therefore, this paper puts forward suggestions on improving the level of farmers' health literacy, optimizing the compensation policy for the Green for Grain Program and developing the service industry policy in the areas where the Green for Grain Program is implemented. This study has certain policy guidance and reference value for the Chinese government to continue to consolidate the results of the Green for Grain Program to alleviate poverty and improve the well-being of farmers in developing countries. (c) 2023 Economic Society of Australia, Queensland. Published by Elsevier B.V. All rights reserved.