In the 1980s and for much of the 1990s Indonesia was widely recognized as a development success story. In late 1997 the situation began to change. After declining gradually between August and December, the exchange rate plummeted in January of 1998. In 1998 per capita GDP contracted by about 12 percent -- a change on the same order of magnitude as the Great Depression. The research we propose focuses on understanding the impact of Indonesia's financial crisis on use of health care, a key form of investment in human capital, and on health status, an important element of well-being. We use data from four rounds of a panel survey of individuals, households, and communities in Indonesia: the Indonesia Family Life Survey. The proposed research has four goals. One goal is to identify the demographic and economic sub-groups that experienced the largest changes in use of health care and health outcomes during the economic crisis. A second goal is to exploit the unusually dramatic changes in the health service environment during the economic crisis to gain insights into how the price and quality of health services impact use of health care and health outcomes. In the wake of the crisis, the Government of Indonesia has implemented several social safety net interventions aimed at protecting the health care use and health status of the Indonesian population. As a third goal, we will assess the efficacy of these programs. Finally, because many of the changes that we hypothesize will affect service use and health status occur at the community-level, we will investigate the relationship between background characteristics at the community level and changes in characteristics such as levels of prices, wages, and access to social safety net programs. The goal of these analyses is to identify both the types of communities most affected by the crisis and the types of communities most likely to benefit from intervention efforts.
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