This paper also contributes to our understanding of how households in developing countries
respond to unexpected changes in household resources. Closely related to the current paper is a set
of papers analyzing the eects of health shocks on income, consumption and household choices (e.g.,
Townsend (1994), Kochar (1995), Gertler and Gruber (2002), and Mohanan (2013)). In focusing
on a household-level shock and human capital investments, this paper also relates to studies of
the impact of household-level shocks on child labor and schooling (e.g., Beegle, Dehejia, and Gatti
(2006) and Yang (2008)). The main distinguishing features of this study are its use of a novel source of variation in access to health insurance, which makes it possible to examine households'
responses to health shocks with and without health insurance.