National Health Insurance and precautionary saving: evidence from Taiwan
Resource
Journal of Public Economics 87,1873-1894
Journal
Journal of Public Economics 87
Pages
1873-1894
Date Issued
2003
Date
2003
Author(s)
DOI
246246/2006111501254612
Abstract
By reducing uncertainty about future medical expenses, comprehensive health insurance
can reduce households’ precautionary saving. We examine this effect using Taiwan micro-data spanning the 1995 introduction of National Health Insurance. The effects of
National Health Insurance are identified using employment-based variation in prior insurance coverage. Replacement of the households’ prior insurance coverage with National Health Insurance is exogenous to the household, so our estimates are not subject to selection bias. Compared with the preceding government insurance programs, National Health Insurance reduced saving by an average of 8.6–13.7% with the largest effects for households with the smallest saving.
Subjects
National Health Insurance
Precautionary saving
Prudence
Type
journal article
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