The influence of individual health outcomes on individual savings behavior

Abstract

In this essay, data from the 2006 wave of the National Longitudinal Survey of Youth (NLSY79-2006), and the two stage least squares (2SLS) estimation technique are used to investigate the relationship between health outcomes and the willingness of individuals (age 41–50) to save. Health perception, physical component score, mental component score, depression score and the diagnosis of a variety of health problems are used as health measures for the analysis described in this essay. We find that health perception and physical component score are positively related to the willingness of individuals to save; while the diagnosis of major health problems is negatively related to the willingness of individuals to save. The effect of mental component score and depression score on individuals’ willingness to save differs significantly between males and females. A higher mental component score is found to be positively related to the willingness of females to save; while depression score is found to affect the willingness of females to save negatively. Both mental component score and depression score are not related to the willingness of male respondents to save.