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The Impact of Life Expectancy on China’s Household Saving and Health Investment
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TitleThe Impact of Life Expectancy on China’s Household Saving and Health Investment  
AuthorYu Xiumei, Lei Xiaoyan and Wang Min  
OrganizationNational School of Development, Peking University;; 
Key WordsPublic health; Life expectancy; Savings rate; Health investment; Overlapping generations model 
AbstractThe paper constructs a two-period overlapping generations model to study the impact of life expectancy on household savings and health investment, and based on 2004-2009 China Urban Household Survey data and National Diseases Surveillance Points System data, uses fixed effect method and instrumental variable method to test the model results. The theoretical model shows that by modifying the individual lifecycle discounting factor, the life expectancy not only affects the young’s savings but also the their health investment. Especially when the young expect lower life expectancy at old age, they have stronger incentive to increase present heath investment. Consistent with the theory prediction, the empirical results shows that when the life expectancy at city level increases, the savings of individual household will significantly increases and the burden of household health investment expenditure will significantly decline.  
Serial NumberWP1307 
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