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Health Care Quality and Economic Inequality

We argue that health care quality has an important impact on economic inequality and on saving behaviour. We exploit district-wide variability in health care quality provided by the Italian universal public health system to identify the effect of quality on income inequality, health inequality and precautionary saving. We find that in lower quality districts there is greater income and health dispersion and higher precautionary saving. The analysis carries important insights for the ongoing debate about the validity of the life-cycle model and interesting policy implications for the design of health care systems.

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Paper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number 120.

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Date of creation: 01 Jun 2004
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Publication status: Published in Health Economics, April 2007, vol. 16, issue 4, pages 327-346
Handle: RePEc:sef:csefwp:120
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  1. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
  2. Jonathan Gruber & Aaron Yelowitz, 1997. "Public Health Insurance and Private Savings," NBER Working Papers 6041, National Bureau of Economic Research, Inc.
  3. Giucca, P. & Jappelli, T. & Terlizzese, D., 1992. "Earning Uncertainty and Precautionary Saving," Papers 161, Banca Italia - Servizio di Studi.
  4. R. Glenn Hubbard & Jonathan Skinner & Stephen P. Zeldes, 1994. "Precautionary Saving and Social Insurance," NBER Working Papers 4884, National Bureau of Economic Research, Inc.
  5. Erich Battistin & Raffaele Miniaci & Guglielmo Weber, 2003. "What do we learn from recall consumption data?," Temi di discussione (Economic working papers) 466, Bank of Italy, Economic Research and International Relations Area.
  6. Laurence J. Kotlikoff, 1986. "Health Expenditures and Precautionary Savings," NBER Working Papers 2008, National Bureau of Economic Research, Inc.
  7. Palumbo, Michael G, 1999. "Uncertain Medical Expenses and Precautionary Saving Near the End of the Life Cycle," Review of Economic Studies, Wiley Blackwell, vol. 66(2), pages 395-421, April.
  8. Victor R. Fuchs & Mark McClellan & Jonathan Skinner, 2001. "Area Differences in Utilization of Medical Care and Mortality Among U.S. Elderly," NBER Working Papers 8628, National Bureau of Economic Research, Inc.
  9. Caballero, Ricardo J., 1990. "Consumption puzzles and precautionary savings," Journal of Monetary Economics, Elsevier, vol. 25(1), pages 113-136, January.
  10. Christopher D. Carroll & Andrew A. Samwick, 1995. "How Important is Precautionary Saving?," NBER Working Papers 5194, National Bureau of Economic Research, Inc.
  11. Tullio Jappelli & Mario Padula, 2002. "The Quality of Health Care: Evidence from Italy," CSEF Working Papers 84, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  12. Martha Starr-McCluer, 1994. "Health insurance and precautionary saving," Finance and Economics Discussion Series 94-10, Board of Governors of the Federal Reserve System (U.S.).
  13. Paul Gertler & Jonathan Gruber, 1997. "Insuring Consumption Against Illness," NBER Working Papers 6035, National Bureau of Economic Research, Inc.
  14. Grossman, Michael, 2000. "The human capital model," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 7, pages 347-408 Elsevier.
  15. Orazio P. Attanasio & Agar Brugiavini, 2003. "Social Security And Households' Saving," The Quarterly Journal of Economics, MIT Press, vol. 118(3), pages 1075-1119, August.
  16. Janet Currie & Brigitte C. Madrian, 1998. "Health, Health Insurance and the Labor Market," JCPR Working Papers 27, Northwestern University/University of Chicago Joint Center for Poverty Research.
  17. Behrman, Jere R & Birdsall, Nancy, 1983. "The Quality of Schooling: Quantity Alone is Misleading," American Economic Review, American Economic Association, vol. 73(5), pages 928-46, December.
  18. Angus S. Deaton & Christina Paxson, 1998. "Health, Income, and Inequality over the Life Cycle," NBER Chapters, in: Frontiers in the Economics of Aging, pages 431-462 National Bureau of Economic Research, Inc.
  19. Michael Hurd & Arie Kapteyn, 2003. "Health, Wealth, and the Role of Institutions," Journal of Human Resources, University of Wisconsin Press, vol. 38(2).
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