The Influence of Basic Medical Insurance for Urban and Rural Residents on Farmers’ Entrepreneurship —— Based on the Quasi-natural Experiment of Medical Insurance for Urban and Rural Residents

With the economic development of China entering the transition period, mass entrepreneurship and innovation has become an important way to promote economic growth, but at the same time, the downward pressure on the economy is increasing, and farmers’ entrepreneurship is facing increasing challenges. In January 2016, the State Council issued the Opinions on Integrating the Basic Medical Insurance System for Urban and Rural Residents and established the basic medical insurance for urban and rural residents as a whole. As an important social security system in China, medical insurance for urban and rural residents is not only a vivid embodiment of rural good governance leading to rural revitalization but also may have a positive impact on farmers’ entrepreneurship. Therefore, based on the data from the China Health and Retirement Longitudinal Study (CHARLS) in 2015 and 2018, this paper investigates the influence of urban and rural residents’ basic medical insurance on farmers’ entrepreneurial behaviour by using the method of Difference-in-Differences (DID). It is found that the implementation of basic medical insurance for urban and rural residents has significantly improved the entrepreneurial willingness of rural residents. When the cluster level is set to individual, its entrepreneurial probability has increased by about 4%. When the cluster level is changed to household and community, there is also a significant promotion effect. Secondly, this paper analyzes the influence mechanism of urban and rural residents’ medical insurance on entrepreneurship by using expected utility theory, life cycle theory and precautionary saving theory: urban and rural residents’ medical insurance enhances farmers’ economic security by reducing risk exposure level and medical burden, and then improves their entrepreneurial willingness. Furthermore, this paper analyzes the heterogeneity of different groups and finds that medical insurance for urban and rural residents has a more significant role in promoting entrepreneurship for male, people aged 60 or below, people with good health, people with bachelor’s degrees or below and married people. Based on this, this paper holds that basic medical insurance for urban and rural residents not only reduces the economic risks caused by diseases but also plays an active role in encouraging farmers to start businesses and increase their income, promoting medical equity and improving social welfare. Therefore, relevant departments should continue to implement the policy of merging the two insurances into one, popularize entrepreneurship knowledge, strengthen rural entrepreneurship publicity and help work, so as to give full play to the promoting effect of medical insurance on rural residents’ entrepreneurship and help realize rural revitalization in China.