Health Insurance and Precautionary Saving

Posted: 20 Dec 1998

See all articles by Martha Starr

Martha Starr

American University - Department of Economics


Recent studies stress precautionary motives for saving: with uncertain income and health, households may accumulate wealth to guard against lower consumption in the future. This paper examines the relationship between health insurance and savings, using high-quality data on household finances. The precautionary view predicts higher savings among households without insurance, ceteris paribus. I find that insurance does reduce saving, once the endogeneity of coverage is taken into account.

JEL Classification: E21

Suggested Citation

Starr, Martha, Health Insurance and Precautionary Saving. Available at SSRN:

Martha Starr (Contact Author)

American University - Department of Economics ( email )

4400 Massachusetts Avenue, N.W.
Washington, DC 20016-8029
United States
202-885-3747 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics