Wednesday, October 28, 2020 | 2:00pm - 3:30pm | ZOOM, Room 337

Abstract

Based on the China Health and Retirement Longitudinal Study (CHARLS), we document large inequalities in terms of health condition and mortality rate across regions and sectors of employment in China. We quantitatively evaluate the importance of the following contributing factors: (i) heterogeneity in income and wealth levels; (ii) heterogeneity in house price growth rates; (iii) heterogeneity in health care price measured as the share of out-of-pocket medical expense among total medical expense. In addition, our counterfactual experiments show that a drop in house price of 30% only increases mortality rate slightly and leads to minor changes in portfolio composition in the long run. A decrease of health care price (i.e. better insurance coverage) by 30% decreases mortality rate between 10-33%. The better medical insurance coverage also decreases wealth accumulation significantly, indicating that high medical cost is an important driver of savings among the elderly.