Chiang-Ming Chen () (Department of Economics, National Chi Nan University, Nantou, Taiwan) Kuo-Liang Chang (Department of Economics, South Dakota State University)
Abstract
This paper aims to study labor supply and saving decisions as a result of health uncertainty. O’Donnell (1995) suggested a theoretical positive relationship between working hours (or saving rate) and the perceived health uncertainty. That is, for risk-averse individuals, there exists a precaution motion to work harder and save more when facing the uncertainty for the health condition. We test this hypothetical relationship by applying the 2003-2005 data from the Panel Study of Family Dynamics (PSFD) in Taiwan. Following Hughes and Maguire’s approach (2003), our estimation result indicates that a stochastic sickness has positive effects on the decisions of working time and saving rate.
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Publisher Info
Paper provided by South Dakota State University, Department of Economics in its series SDSU Working Papers (in Progress) with number
32009.
Find related papers by JEL classification: D14 - Microeconomics - - Household Behavior - - - Personal Finance I12 - Health, Education, and Welfare - - Health - - - Health Production J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
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