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Ageing and the long-run fiscal sustainability of health care across levels of government

Author

Listed:
  • Pietrangelo de Biase
  • Sean Dougherty
  • Luca Lorenzoni

Abstract

OECD economies are undergoing a seemingly inevitable process of population ageing that has been changing income and consumption patterns. Notably, the demand for health services is expected to increase, while labour forces are projected to shrink. Both factors are projected to negatively impact the sustainability of health systems – the former through an increase in government expenditures on health and the latter through a decrease in government revenues. As health systems and their funding streams tend to be at least partially decentralised in most OECD countries, this fiscal pressure is expected to be asymmetric across levels of government. The objective of this paper is to provide order-of-magnitude estimates of the possible effects of population ageing on government finances across OECD countries, and to discuss reforms to fiscal federalism and intergovernmental relations with the purpose of funding expenditures at all levels of government.

Suggested Citation

  • Pietrangelo de Biase & Sean Dougherty & Luca Lorenzoni, 2022. "Ageing and the long-run fiscal sustainability of health care across levels of government," OECD Working Papers on Fiscal Federalism 38, OECD Publishing.
  • Handle: RePEc:oec:ctpaab:38-en
    DOI: 10.1787/7c184406-en
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    Cited by:

    1. Yabesh Ombwori Kongo & Elvis Kimani Kiano & Joash Ogolla Ogada & Peter Isaboke Omboto, 2023. "The Effect of Debt Service Ratio and Exchange Rate on Public Debt Sustainability in Kenya," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(11), pages 302-312, November.
    2. Carmen Marín-González & Diego Martínez-López, 2024. "Fiscal stabilisation, debt sustainability and public spending in subnational governments. The case of the Spanish regions," Studies on the Spanish Economy eee2024-02, FEDEA.

    More about this item

    Keywords

    demographics; fiscal federalism; intergovernmental relations; revenue bouyancy; tax policy;
    All these keywords.

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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