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Welfare State and Life Satisfaction: Evidence from Public Health Care

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  • Jani-Petri Laamanen

    (FDPE, and University of Tampere)

  • Kaisa Kotakorpi

    (FDPE, and University of Tampere)

Abstract

We examine the effect of publicly provided health care on welfare by combining local level data on public health care, and individual level data on life satisfaction. It is shown that relatively high expenditures in health care have a positive effect on individuals' life satisfaction in our data. We further illustrate how life satisfaction data can be used to directly test theoretical hypotheses about how the welfare effect of public provision should vary among different groups in the population. We find some evidence for an "ends-against-the-middle" equilibrium (Epple and Romano, 1996) in the provision of public health care, where middle-income individuals prefer higher public expenditure at the margin than low-income or high-income individuals. Further, our results indicate that valuation for health care depends on individual political orientation.

Suggested Citation

  • Jani-Petri Laamanen & Kaisa Kotakorpi, 2007. "Welfare State and Life Satisfaction: Evidence from Public Health Care," Tinbergen Institute Discussion Papers 07-053/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20070053
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    More about this item

    Keywords

    Life satisfaction; public provision; health care;
    All these keywords.

    JEL classification:

    • H44 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Goods: Mixed Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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