IDEAS home Printed from https://ideas.repec.org/a/wly/iecrev/v60y2019i4p1823-1859.html
   My bibliography  Save this article

Explaining The Decline Of The U.S. Saving Rate: The Role Of Health Expenditure

Author

Listed:
  • Yi Chen
  • Maurizio Mazzocco
  • Béla Személy

Abstract

The U.S. saving rate declined by 8% between 1980 and 2009. We document that the decline can be explained by rising health expenditures. Using exogenous variation in medical expenses generated by Food and Drug Administration drug approvals, we document that a 1 percentage point increase in health expenditure generated a decline in saving rate of 0.9 percentage points. We then estimate a model of household decisions to evaluate the mechanisms behind the decline. We find that the rise in health expenses and drop in saving rate are driven by progress in health technology, reduction in copayment rates, and improvements in income processes.

Suggested Citation

  • Yi Chen & Maurizio Mazzocco & Béla Személy, 2019. "Explaining The Decline Of The U.S. Saving Rate: The Role Of Health Expenditure," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(4), pages 1823-1859, November.
    • Handle: RePEc:wly:iecrev:v:60:y:2019:i:4:p:1823-1859
    DOI: 10.1111/iere.12405
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/iere.12405
    Download Restriction: no
    File URL: https://libkey.io/10.1111/iere.12405?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:iecrev:v:60:y:2019:i:4:p:1823-1859. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/deupaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.