Working Paper: CEPR ID: DP4542
Authors: Tullio Jappelli; Luigi Pistaferri; Guglielmo Weber
Abstract: 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.
Keywords: health care; income inequality; precautionary saving
JEL Codes: D31; D91
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| higher health care quality (I11) | lower income inequality (D31) |
| higher health care quality (I11) | lower health shocks (I14) |
| lower income inequality (D31) | reduced earnings dispersion (J31) |
| low-quality health care (I14) | longer wait times for treatment (I11) |
| longer wait times for treatment (I11) | greater income dispersion (D31) |
| higher health care quality (I11) | lower health inequality (I14) |
| lower-quality health care (I14) | higher levels of precautionary saving (E21) |