Education versus savings as explanations for better health: Evidence from the Health and Retirement Survey

The paper reports on the results of a study of the health status of 4,917 middle age couples in the
HRS. The main finding is that savings propensity appears to be a key component to health outcome.
Savers make consumption choices that improve their health, accumulate fewer ailments and enjoy lower
mortality rates. The results are consistent with either Becker-Mulligan who posit that education makes
individuals more forward looking; or Fuchs who hypothesizes that individuals with lower rates of time
preference select themselves into higher levels of education.
While education as such matters less after inclusion of savings and other variables, it still affects
choices about consumption that affects health, though its effect is not explained by better information. It
also affects the rate of ill health, holding constant consumption decisions and existing maladies.
If the family’s investment behavior importantly influences health outcome, then longer long-term
improvements in overall health may depend less on improved flows of health information, and more on a
gradual spread of a longer-term outlook among larger portions of the population. Whether far-sighted
behavior is learned in the family or through the education process is an important and open question.