Commercial Health Insurance And Chinese Saving Puzzle: Theory Construction And Empirical Evidence From Precautionary Savings Theory

This paper expands Dynan (1993) precautionary savings model to analyze the impact of commercial health insurance on household precautionary savings and empirically tests the impact based on data from the 2013 China Household Finance Survey. We find that Chinese urban families insure commercial health insurance can significantly reduce their health savings rate and general savings rate, and this effect is more pronounced in families with health risks or lower income levels. Further analysis dividing regional economic development level finds that the impact of commercial health insurance on reducing urban household precautionary savings is the strongest in the central region, followed by the western region and the weakest in the eastern region. Through theoretical construction and empirical tests, this paper provides a new interpretation for the "Chinese saving puzzle" from the perspective of commercial health insurance, as well as enriches existing researches on precautionary savings theory and household savings. Moreover, this paper provides an empirical basis for the necessity of developing commercial health insurance and building a multi-level medical security system in China.