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Private Medical Insurance and Saving: Evidence from the British Household Panel Survey

  • Alessandra Guariglia

    ()

    (University of Kent, Canterbury)

  • Mariacristina Rossi

    ()

    (University of Rome II - Faculty of Economics)

This paper uses the British Household Panel Survey for the years 1996 to 2000 to investigate whether individuals in the UK save for precautionary motives against uncertain medical costs. In particular, we test the hypothesis that those individuals who are not covered by private medical insurance, and who are therefore more exposed to facing unexpected health care expenditures or loss of income while waiting for treatment, tend to save more than those who are covered. According to our findings, which are based on a wide range of econometric specifications, there is a positive association between insurance coverage and saving, suggesting that private medical insurance does not crowd out private saving. This relationship is however weaker in areas where people feel the quality of medical facilities to be poor and in rural areas.

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Paper provided by Tor Vergata University, CEIS in its series CEIS Research Paper with number 39.

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Length: 36
Date of creation: 20 Nov 2003
Date of revision:
Handle: RePEc:rtv:ceisrp:39
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  1. Hubbard, R Glenn & Skinner, Jonathan & Zeldes, Stephen P, 1995. "Precautionary Saving and Social Insurance," Journal of Political Economy, University of Chicago Press, vol. 103(2), pages 360-99, April.
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