make use of health services will suffer from censoring and lack the representativeness required to allow extrapolation for a larger population. Taken together, these factors imply that strong conclusions on specific policies are in some cases arrived at based on inadequate empirical foundations or do not allow inferences on the broader economic and social costs and benefits of an intervention.

In this paper we aim to contribute to the emerging literature on this topic by exploring the impact of the abolition of health user fees in Uganda. In doing so we expand on the available literature, which consists mainly of case studies with a limited outreach, in a number of respects. First, while most empirical studies have explored the impact of imposing health user fees, we focus on the abolition of such fees, assessing in particular whether doing so has helped the poor gain greater access to curative services and to reduce overall morbidity in the population. Second, in addition to administrative data, we draw on data from two large-scale nationally representative household surveys, before and after this intervention, to assess the impact of this measure on the change in individuals’ probability of accessing health services and the associated health outcomes. Finally, we exploit regression results to compute the change in households’ expected level of sickness, which, valued at the prevailing wage rate for unskilled labor, provides a lower bound for the economic benefits associated with the abolition of user fees. This allows us to draw inferences on the incidence of benefits from this policy in terms of time that is spent working rather than tending sicknesses. More interestingly, we can, by comparing the overall economic benefits to the costs in terms of foregone revenue from user fees, arrive at a measure of social costs and benefits of the policy change that are nationally representative and that may be of interest for the debate beyond Uganda.

We find that the abolition of user fees significantly improved access to health services especially by the poor, whose spending on health (at the household level) is significantly reduced after the policy change. The fact that there is little change in aggregate spending on health suggests that at least to some degree those who are better off may have opted out of the public system in favor of private providers. There is also evidence of a clear reduction in the incidence of morbidity and the elimination of asset bias in access to treatment that had characterized the system before the abolition of user charges. Comparing the revenues that health establishments have had to forgo as a result of the elimination of user charges to the value of the time that was, after the reform, spent working rather than treating sicknesses suggests that the benefits from the policy change exceed the costs and allows us to draw implications in a number of dimensions.

The paper is structured as follows. Section 2 reviews the literature and describes the situation of public health services in Uganda and the data used. In addition to providing a number of descriptive statistics, the section examines to what extent there is a link between increased cost recovery and improved quality of service delivery in a number of dimensions. Section 3 explores determinants of health service 2