Topic and Abstract：
How Do People Respond to Increased Fund Inflows into Medical Savings Accounts (MSAs): Evidence from Administrative Data in China.
This paper investigates how people respond to policy-induced increases in fund inflows at specific age thresholds into medical savings accounts (MSAs) over their life cycle. After the age of 35 or 45, the employer contributions to the employee's MSA increase by 0.5 percent of their pre-tax wages. By utilizing administrative data on the Urban Employee Basic Medical Insurance from a prefecture-level city in China and employing an event study approach, we find that the introduction of additional fund inflows prompts enrollees to increase MSA fund outflows by 9 percent and spending on outpatient care and drugstore purchases by about 8 percent. This suggests that the estimated marginal propensity to consume (MPC) from MSA funds lies between 0.5 and 0.6. Meanwhile, we find significant responses and similar MPCs among individuals with varying socioeconomic statuses, including wage, pre-event MSA balance, education, and hukou status. Notably, we do not observe significant changes in outcomes at alternative age thresholds or in employees' wages. These results highlight that people perceive MSAs as mental accounts earmarked for healthcare expenditure rather than saving vehicles, and healthcare consumption is sensitive to liquidity.
Speaker Profile: Ta Yuqi
Ta Yuqi is a PhD student at the National School of Development of Peking University (expected to graduate in 2024) and was selected as one of the "Job Market Star" doctoral graduates at the 23rd Annual China Economics Conference. Her research interests include health economics, labour economics and development economics, and her research results have been published in Social Science & Medicine, China Economic Quarterly, The Journal of World Economy and other international and Chinese academic journals. She has participated in several major projects of the National Social Science Foundation of China. She was awarded the National Scholarship for Doctoral Students and the Presidential Scholarship for Doctoral Students of Peking University.
Host: Zhang Ziyao
Associate Professor of the School of Public Finance and Taxation of ZUEL
Researcher of IIDPF
Conference Information
Time: 1st December 2023 (Friday) 11:00 am-12:30 pm
Venue: Conference Room 119, Wenqin Building