2016 Fiscal Year Research-status Report
Wealth-Health Inequality at Retirement: an Implication for a Social Security Reform
| Project/Area Number |
15K03505
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| Research Institution | National Graduate Institute for Policy Studies |
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Principal Investigator |
Porapakkarm P. 政策研究大学院大学, 政策研究科, 助教授 (10751266)
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| Project Period (FY) |
2015-04-01 – 2018-03-31
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| Keywords | Health spending / wealth-health gradient / life-cycle model / health insurance / tax subsidies / risk-sharing / Medical spending |
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| Outline of Annual Research Achievements |
I and research collaborators examine the economic costs of bad health. We first estimate a health shock process, then introduce into a life-cycle model that can match three important facts:(1) The dynamics of health;(2) The quantitative impact of bad health on labor earnings, medical spending, and life expectancy;(3)The large disparity in accumulated wealth between the healthy and the unhealthy at retirement, so called wealth-health gradient. We find that the costs of bad health among the working age people steeply increases with the number of years being unhealthy and the largest component of these costs is the loss in labor earnings. In addition, due to the high persistence of bad health the monetary cost of being unhealthy during the working ages is highly concentrated. Specifically, the loss among the top 20% accounts for almost 80% of the total loss. To evaluate the non-pecuniary effects of health, we evaluate the willingness to pay to be healthy and we find that the most valuable aspect of being healthy is a longer life expectancy. Our result is the first one quantifying a large heterogeneity in pre-determined factor affecting ability to recover from bad health, which can be interpreted as genetic factors, initial health-related factors developed during pre-adult ages or life-style. Importantly, these factor are correlated with individual preferences. Thus the composition difference between healthy and unhealthy people is important in explaining the observed wealth-health gradient.
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| Current Status of Research Progress |
Current Status of Research Progress
3: Progress in research has been slightly delayed.
Reason
Based on the original plan, our project is a bit delayed. But as of today, we have most of the main results of the final paper in the project, which is reported in the previous section. We are now working on the first draft and rechecking some results we have. We expect to finish the draft of the last part of this project by June 2017.
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| Strategy for Future Research Activity |
Now I and my research collaborators are working on the draft of the paper related to the last part of the project. We expect to finish the draft by June 2017. Then we are scheduling to have the paper presented in various international workshop and conferences. After that we will incorporate all comments and feedbacks into the final version of the paper before submitting for a publication in a peer-reviewed journal by the early 2018.
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| Causes of Carryover |
In Fiscal year 2016, I have a budget left to carry over to Fiscal year 2017. Due to my schedule in 2016, I rescheduled a research trip and some conference presentations to the later half of 2017.
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| Expenditure Plan for Carryover Budget |
1)In Fiscal year 2017, I plan to use the carry over and new funds to support research meeting trips with my collaborators on this project and conference trips to present our paper.
2)A part of the funds will be allocated to purchase and upgrade research equipment, such as computer and its peripherals. This includes software licensing fees.
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[Presentation] Lifetime Costs of Bad Health2016
Author(s)
Ponpoje Porapakkarm
Organizer
Seminar at Economics Department
Place of Presentation
University of Hong Kong (Hong Kong, China)
Year and Date
2016-12-09 – 2016-12-09
Int'l Joint Research / Invited
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[Presentation] Lifetime Costs of Bad Health2016
Author(s)
Ponpoje Porapakkarm
Organizer
Seminar at Economics Department
Place of Presentation
University of Tokyo (Bunkyo-ku, Tokyo)
Year and Date
2016-12-01 – 2016-12-01
Int'l Joint Research / Invited
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[Presentation] Lifetime Costs of Bad Health2016
Author(s)
Ponpoje Porapakkarm
Organizer
Seminar at Economics Department
Place of Presentation
Keio University (Minato-ku, Tokyo)
Year and Date
2016-10-25 – 2016-10-25
Int'l Joint Research / Invited
