The Microeconomic Effect of Longevity on Savings: Evidence from the Health and Retirement Study

This paper seeks to address the microeconomic link between health, particularly longevity, and savings rates. Using the expansive Health and Retirement Study, a microeconomic model for savings is generated. Both ordinary least squares and two stage least squares regressions, with height as an instrument for life expectancy estimates found in the survey, show a tentative positive link between longevity and savings. In the grander scheme, these results underscore the returns to an economy from investment in health care, decreased morbidity and increased longevity.