The impact of private health insurance on household savings: Evidence from Australia

John Nguyen
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John Nguyen: Monash University

Warwick-Monash Economics Student Papers from Warwick Monash Economics Student Papers

Abstract: This paper analyses for the first time, the relationship between private health insurance and household savings behaviour in Australia. Using the nationally representative longitudinal dataset from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, we estimate the effect of private health insurance on savings, wealth accumulation and different types of asset holdings. We find strong evidence of a positive relationship between private health insurance and savings using a variety of panel fixed-effects, instrumental and non- instrumental methods. The magnitude of the effect is larger for households that do not receive public transfers, reside in a major city, have better health or have completed tertiary education. Our findings show that time preference is a partial mediation channel between private health insurance and savings, resulting in larger effects for non-financial asset holdings driven mostly by real estate wealth.

Keywords: Private health insurance; savings, wealth accumulation; Australia JEL classifications: I13; D14; E21; G51 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-des, nep-fdg and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:wrkesp:48

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