A cross-sectional examination of the impact of health shocks on wealth: Evidence from English Panel data

The study of individuals with low wealth and in particular with intense amount of decline in wealth holdings late in life is particularly relevant for the analysis of social security and public health insurance programmes. Individuals reached retirement with substantial saving, however drained wealth rapidly; perhaps in response to unexpectedly large expenditure shocksare our subject of this study. In this study we examine health problems and associated health care expenses impose on wealth on older individuals in England. The results point out that chronic conditions both existing and new health events significantly reduce the wealth as compared to mild conditions. The age of the chronic diseases additionally has impact on wealth negatively. In particular, severe existing chronic diseases aged of more than 3 years has greater impact than severe chronic diseases associated with individuals for more than 1 year. The empirical evidence exhibit no significant changes in wealth if the individual is having a mild chronic disease irrespective of the fact that they are diagnosed more than 3 years or 1 year ago. Additional health insurance, highly educated and remaining in a marriage seems to have mitigating effect on wealth decline in older ages.