Chinese healthcare system reforms and household saving patterns: some stylised facts

This chapter aims to evaluate the relationship between one of the recent healthcare reforms in the People's Republic of China and household decisions both in terms of out-of-pocket expenditure and saving. Evidence on the results achieved by reforms of the health insurance sector in terms of reducing out-of-pocket medical expenditure is still uncertain and contradictory, and very little is known about the effect of these measures on the consumption and saving behaviour of the Chinese population. To shed light on this issue we use data collected by Chinese Household Income Project surveys (CHIPs), through a series of questionnaire-based interviews conducted in urban areas in 1995 and 2002. Our descriptive analysis suggests that there is a positive relationship between public health insurance coverage and household saving. This empirical evidence suggests that public insurance coverage is ineffective as a source of protection against income losses and might induce households to save more.