DP4542 Health Care Quality and Economic Inequality

Author(s): Tullio Jappelli, Luigi Pistaferri, Guglielmo Weber
Publication Date: August 2004
Keyword(s): health care, Income inequality, precautionary saving
JEL(s): D31, D91
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=4542

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.