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Does Ageing Call for a Reform of the Health Care Sector?

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  • W. M. T. Westerhout
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    Abstract

    A popular view is that ageing populations increase health expenditure to GDP ratios because health expenditure correlates positively with age and because the concomitant shrinking of the labour force depresses GDP. The resulting increase in transfers from the young to the old then calls for a reform of health care policies. This article critically examines the arguments underlying this view. It gives credit to factors that counteract the expenditure effect, the effects upon health care market and labour market distortions and the effects upon intergenerational solidarity. Although important, these factors are found to have insufficient weight to invalidate the popular view. (JEL: H21, I10, J10) Copyright 2006, Oxford University Press.

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    File URL: http://hdl.handle.net/10.1093/cesifo/ifj001
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    Bibliographic Info

    Article provided by CESifo in its journal CESifo Economic Studies.

    Volume (Year): 52 (2006)
    Issue (Month): 1 (March)
    Pages: 1-31

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    Handle: RePEc:oup:cesifo:v:52:y:2006:i:1:p:1-31

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    Cited by:
    1. Casper van Ewijk & Nick Draper & Harry ter Rele & Ed Westerhout, 2006. "Ageing and the sustainability of Dutch public finances," CPB Special Publication 61, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Ried, Walter, 2007. "On the relationship between aging, edical progress and age-specific health care expenditures," Wirtschaftswissenschaftliche Diskussionspapiere 08/2007, Ernst Moritz Arndt University of Greifswald, Faculty of Law and Economics.
    3. Colombier, Carsten & Weber, Werner, 2009. "Projecting health-care expenditure for Switzerland: further evidence against the 'red-herring' hypothesis," MPRA Paper 26712, University Library of Munich, Germany, revised Jun 2010.

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