Does "the injury poverty trap" exist? A longitudinal study in Bavi, Vietnam

In this study we concentrate on injuries and affected households' capacities to earn incomes. A longitudinal study was performed in Bavi district, Vietnam, with the specific objectives to investigate: (1) the affects of injuries on incomes by comparing income changes in injured and non-injured individuals; (2) the affect of injuries on social mobility by estimating households' relative risk of dropping into poverty for households with and without injuries and estimating the relative risk of escaping from poverty for households without and with injuries. The propensity score matching method using a logit model was used for data analysis. The results show that on average, the loss per household is estimated at VND 1,084,000 (USD 72) for poor and VND 2,598,000 (USD 173) for non-poor, equivalent to 11 (9) and 15 (13) working months of an average person in the poor and non-poor group, respectively, during 1999 (2001). The relative risk of dropping into poverty for non-poor households with and without injuries equal to 1.21 (p=0.08) and the relative risk of escaping from poverty between poor households without and with injuries equal to 0.96 (p=0.39). In conclusion, it has been argued that the introduction of user fees created a poverty trap and thus their removal may be a solution. However, user fees are only a part of the burden on households. Loss of income during the illness period is likely to be a problem of the same magnitude. A successful solution must thus follow two tracks: prepayment of health care and some insurance based compensation of income losses during the illness period. Both reforms, if they are persistent, must be done within the resource limits of the local society. If the risk of catastrophic illness is more evenly spread across the society, it would increase the general welfare even if no more resources are provided.