Public and Private Expenditures on Health in the Presence of Inequality and Endogenous Mortality: A Political Economy Perspective
AbstractIn this paper we study an overlapping-generations model in which agentsï¿½ mortality risks, and consequently impatience, are endogenously determined by private and public investment in health care. The proportion of revenues allocated for public health care is also endogenous, determined as the outcome of a voting process. Higher substitutability between public and private health is associated with a ï¿½crowding-outï¿½ effect which leads to lower public expenditures on health care in the political equilibrium. This in turn impacts on mortality risks and impatience leading to a greater persistence in inequality and long run distributions of wealth that are bimodal.
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Bibliographic InfoPaper provided by School of Economics and Finance, Queensland University of Technology in its series School of Economics and Finance Discussion Papers and Working Papers Series with number 240.
Length: 38 pages
Date of creation: 15 Dec 2008
Date of revision: 15 Dec 2008
health; inequality; political economy; income distribution dynamics;
Find related papers by JEL classification:
- I12 - Health, Education, and Welfare - - Health - - - Health Production
- I20 - Health, Education, and Welfare - - Education - - - General
- O5 - Economic Development, Technological Change, and Growth - - Economywide Country Studies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-01-24 (All new papers)
- NEP-DGE-2009-01-24 (Dynamic General Equilibrium)
- NEP-HEA-2009-01-24 (Health Economics)
- NEP-PBE-2009-01-24 (Public Economics)
- NEP-POL-2009-01-24 (Positive Political Economics)
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