2018 Fiscal Year Final Research Report
Wealth-health inequality at Retirement: an Implication for a Social Security Reform
| Project/Area Number |
15K03505
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Multi-year Fund |
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| Section | 一般 |
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| Research Field |
Public finance/Public economy
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| Research Institution | National Graduate Institute for Policy Studies |
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Principal Investigator |
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| Research Collaborator |
Mariacristina De Nardi
Pashchenko Svetlana
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| Project Period (FY) |
2015-04-01 – 2019-03-31
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| Keywords | health risk / medical expenses risk / health inequality / health-wealth gradient |
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| Outline of Final Research Achievements |
First, we documented that medical spending in the US is highly concentrated: the top 5% of spenders account for more than half of the total expenditure. This concentration decreases with age. In addition, the average medical spending of people in the bottom income quintile is higher than that of people in the top income quintile for all age groups. Our results show that medical expense or health risk is an important source of risk an individual faces over life course.
Second, we examine how health risk is linked to economic inequality among people near retirement age. We find that factors predetermined in early stage of life are very important in accounting for the link between health inequality and economic inequality. These factors explain 60% of the wealth-health inequality at retirement age. Our quantitative results show that the difference in survival probability between the healthy and unhealthy is an important channel magnifying health induced inequality over the life-cycle.
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| Free Research Field |
analysis of welfare program and labor market
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| Academic Significance and Societal Importance of the Research Achievements |
Health and medical expense risks are closely linked to economic inequality among older adults. Our findings that factors predetermined in early stage of life are important in explaining this link implies that a policy intervention should be introduced much earlier, not only focusing on older adults.
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