Health, Pension Benefits and Longevity How They Affect Household Savings?

Najat El Mekkaoui () and Joaquim Oliveira Martins

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Abstract: This paper analyses the impact of health, pension systems and longevity on savings. It uses a simple life-cycle model embodying social transfers (health care and pension expenditures) and changes in longevity to determine the level of household savings. From this model, we derived an econometric specification, augmented with the effects of public budget balances. The model is estimated for a panel of 22 OECD countries for the period 1970-2009. Our principal result is that, from the point of view of incentive to save, health transfers have a similar impact as pension replacement rates. Therefore, welfare reforms that reduce replacement rates without reforming health system may not have all the expected impact on household savings. In line with life-cycle theory, we found that longevity increases saving ratios.

Keywords: Ageing; longevity; health; consumption; pension systems; saving (search for similar items in EconPapers)
Date: 2014
Note: View the original document on HAL open archive server: https://hal.science/hal-01519827
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Citations: View citations in EconPapers (6)

Published in The Journal of the Economics of Ageing, 2014, 3, pp.21-28. ⟨10.1016/j.jeoa.2014.03.001⟩

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Journal Article: Health, pension benefits and longevity: How they affect household savings? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01519827

DOI: 10.1016/j.jeoa.2014.03.001

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