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The intergenerational content of social spending : health care and sustainable growth in China

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  • Jean-Paul Fitoussi

    (OFCE)

  • Francesco Saraceno

    (OFCE)

Abstract

The paper endorses the thesis that current macro imbalances are partly due to an excess of household savings in China, whose origin is to be found among other things in household uncertainty about the provision of public services like health care, pensions and education. Focusing on health services, because of their priority in the concerns of the Chinese people, we describe the recent trends in the provision of health care. We then argue that social spending by the government may have important intergenerational content, in that it allows higher private spending, lower inequality, higher levels of human capital and the like. All these factors are related to the potential growth rate of the economy. We conclude that a more important role of the government in the sector of public services, and in particular of health care, may help reduce the possibility of future bottlenecks, and hence help keeping the Chinese economy on a sustainable growth path. We conclude the paper by an assessment of the current debate on how to reform the system, and we advocate universal publicly funded basic health coverage.

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Bibliographic Info

Paper provided by Sciences Po in its series Sciences Po publications with number 2008-27.

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Date of creation: Sep 2008
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Handle: RePEc:spo:wpmain:info:hdl:2441/6741

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Keywords: social spending; health care; sustainable growth; Chinese economy; saving gluts;

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References

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  1. Rafael Domenech & Javier Andres & Antonio Fatas, 2006. "The Stabilizing Role of Government Size," Working Papers, International Economics Institute, University of Valencia 0603, International Economics Institute, University of Valencia, revised Jan 2007.
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  11. Kanbur, Ravi & Zhang, Xiaobo, 2004. "Fifty Years of Regional Inequality in China: A Journey through Central Planning, Reform, and Openness," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Rebalancing and Small Europe
    by Francesco Saraceno in Sparse Thoughts of a Gloomy European Economist on 2012-04-05 08:39:57
  2. La Cina è lontana da Berlino
    by keynesblog in Keynes Blog on 2012-04-05 09:29:10
  3. Who will pay the bill in Sicily?
    by laurence-df in OFCE le blog on 2012-10-04 06:00:29
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Cited by:
  1. Cheung, Diana & Padieu, Ysaline, 2011. "Impact of Health Insurance on Consumption and Saving Behaviours: Evidence from Rural China," Proceedings of the German Development Economics Conference, Berlin 2011 18, Verein für Socialpolitik, Research Committee Development Economics.

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