Informal employment and catastrophic health expenditures: Evidence from Pakistan.

Workers in informal employment suffered significant out-of-pocket healthcare expenditures (OOPHEs) due to their low earnings and a lack of a social safety net or health insurance. There is little or no evidence of impoverishment caused by OOPHEs in the context of labor market categorization. Therefore, this study examines the economic burden of OOPHEs and its associated consequences on households, whose members are in informal employment. This study estimates the incidence of catastrophic health expenditures (CHEs) and impoverishment across the households in formal and informal employment and their key determinants in Pakistan by employing the data from the two rounds of the Household Integrated Economic Survey (2015-16, 2018-19). For measuring CHEs and impoverishment, the budget share and capacity-to-pay approaches are applied. Various thresholds are used to demonstrate the sensitivity of catastrophic measures. We found a higher incidence of catastrophic healthcare payments among the informal workers, that is, 4.03% and 7.11% for 2015-16 and 2018-19, respectively, at a 10% threshold, while at a 40% threshold, the incidence of CHEs is found to be 0.40% and 2.34% for 2015-16 and 2018-19, respectively. These OOPHEs caused 1.53% and 3.66% of households who are in informal employment to become impoverished, compared with their formal counterparts. The study demonstrates that the probability of incurring CHEs and becoming impoverished is high among informal workers, compared with their formal counterparts. This result has clear policy implications, in which to protect the informal workers, it is necessary to expand the insurance coverage, particularly during the COVID-19 response and recovery efforts.

Economic burden of tobacco use in Pakistan.

BACKGROUND: The lack of reliable tobacco healthcare and economic cost estimates leaves the tobacco industry undertaxed and thriving in Pakistan and makes the country as one of the top tobacco-consuming nations. To facilitate effective tobacco tax policymaking, this study estimates the economic cost of smoking-attributable diseases and deaths in Pakistan. METHODS: A nationally representative sample survey of 13 000 households was administered to gather the data required to estimate different cost components of smoking-attributable diseases through the prevalence-based approach. FINDINGS: The total smoking-attributable economic cost of all diseases and deaths in Pakistan in the year 2018-2019 for persons aged 35 years or older is 615.07 billion ($3.85 billion). Similarly, three major diseases, namely cancer, cardiovascular disease and respiratory disease, along with associated deaths, cost the nation PKR437.8 billion ($2.7 billion) of which 77% is the indirect cost. The three major diseases make 71% of the total estimated cost, nearly two-thirds of which is borne by rural residents, nine-tenth by males and more than four-fifths by the citizens in the 35-64 years age group. CONCLUSION: The total annual economic costs of all smoking-attributable diseases and deaths and those of the three major diseases equal 1.6% and 1.15% of Pakistan's gross domestic product, respectively. The tax contribution of tobacco sector is merely 20% of the total estimated cost. The finding of huge economic and health costs of smoking makes a convincing case for policymakers to realise the true value of the industry's contribution and raise tobacco taxes to the level of full cost recovery.