How does digital infrastructure affect residents' healthcare expenditures? Evidence from Chinese microdata

Abstract

Healthcare expenditure is only one of the heavy burdens that families face in developing countries. Current research mainly focuses on analyzing the effects of financial policy. There is a lack of studies that examine the understanding and assessment of the impact of digital infrastructure on this issue. In this study, we used the Broadband China policy as a quasi-natural experiment to explore the impact of digital infrastructure on residents' healthcare expenditures in China. Using the differences-in-differences (DID) model and micro-survey data, we found that digital infrastructure has a positive impact on reducing the burden of healthcare expenditure in China. Our findings indicate that residents in cities can save up to 18.8% on healthcare expenses following large-scale digital infrastructure construction. Through mechanism analysis, we found that digital infrastructure reduces residents' healthcare expenditures by improving both commercial insurance availability and the healthcare efficiency of residents. In addition, the effects of digital infrastructure on reducing healthcare expenditure are more pronounced among middle-aged individuals, those with low levels of education, and those with low incomes, which indicates this digital construction wave helps bridge the social gap between the poor and the rich. This study provides compelling evidence of the positive impact of digital society construction on social health and wellbeing.