Health Status and the Saving Behaviour of Pensioners Evidence from Romania

Type Working Paper
Title Health Status and the Saving Behaviour of Pensioners Evidence from Romania
Author(s)
URL https://www.cerge-ei.cz/pdf/gdn/rrc/RRCX_60_paper_01.pdf
Abstract
This paper presents evidence on the impact of health related variables on the saving rate of Romanian retired households. With universal public health insurance coverage, a pay-as-you-go pension system and more than 98 per cent of the households owning the house they live in, retired households continue to save, with saving rates increasing faster with the number of healthy members relative to those with a different health status. After controlling for healthcare costs, the positive effect of the health status variables on savings reflects the influence of the precautionary motive alone, as households with at least one ill member during the interview month also save more. Furthermore, once health related variables are controlled for, life expectancy becomes less important in driving savings at old age. Naturally, current healthcare costs like hospital stays and medicines negatively affect the saving rate.

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