Beyond health protection: Estimating the impact of public health insurance on home‐based livestock raising in rural China

Abstract Livestock often serves as self‐insurance against health shocks for rural households in developing countries. However, little is known about how public health insurance affects livestock production decisions. This paper fills the gap by examining the impact of China's New Rural Cooperative Medical Scheme (NRCMS) on household‐level livestock operations. I find that NRCMS significantly expands cooperative insurance coverage while reducing livestock ownership, suggesting that formal insurance crowds out informal risk management. Further analysis shows that households exiting livestock production are more likely to take up low‐skilled off‐farm jobs, pointing to potential gains in geographic and time flexibility. These findings highlight the broader economic effects of public health insurance beyond health protection.