Health Insurance and Household Savings: Evidence from Morocco

This paper investigates the relationship between health insurance and household savings. It first demonstrates that the precautionary motive dominates the saving behavior of Moroccan households, primarily due to the widespread exposure to uncertainty, including frequent income fluctuations, health risks, and limited social insurance coverage. Next, using an instrumental variable strategy, the study examines how access to health insurance affects household saving behavior. The identification strategy leverages the variation in exposure to health risks, driven by chronic disease prevalence, as an exogenous factor influencing saving and consumption decisions. The results reveal two key impacts of health insurance: it crowds out precautionary savings and alters household expenditure patterns. While further research is needed to fully understand these dynamics, policymakers must carefully balance the provision of essential health coverage—particularly with the ongoing expansion of the "Assurance Maladie Obligatoire"—and the need to encourage households to maintain sufficient savings for future needs. JEL Classification Codes: I13, D14, I18