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The Economic Crisis and it Effects on the Social Determinants of Health

  • Guillem López i Casasnovas


    (Universidad Pompeu Fabra)

  • Marina Soley Bori


    (Boston University)

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    With the economic crisis, the fight against unemployment in most countries 1 is coetaneous to the need to restrain public expenditure in closing budget deficits. As a consequence, spending cuts have started to affect a large number of decisions that directly or indirectly may be expected to have an impact on health. These effects are likely to be unevenly distributed among different groups within the population. Therefore, not just health levels but also its distribution may be at risk with the financial consequences of the crisis. The main message of this paper is to show first social concern on the nature of the trade-offs in redefining expenditure priorities. On the prescriptive side of our work we argue that in the present situation we should not focus so much on health expenditure as we should do on the social protection system as a whole. In addition, to fight against poverty (and not so much focusing on income inequality in itself) should be the most important consideration for health policy design. Thus, more selective, tailored made combination of integrated policies should be addressed. Fragile groups need to be prioritized at this stage in battling for poverty alleviation (poverty induces health losses) and for a sound job creation economy (workfare strategies require health at the same time that they produce health). Universal old-style welfare policies commonly lack focus, are not financially sustainable, and overall, they have lower redistributive impacts. Otherwise, random, not well understood, effects in welfare may result from these policies due to side effects from economic crisis, unemployment and changes in life style. Results may also depend on the type of groups benefiting from sustained social spending in practice. A welfare function is required in order to compare “losers” and “winners”. This is a part of the second welfare theorem where non superior Pareto agreements are achievable, and lack of consensus may easily emerge, in designing health strategies since politics may not build the necessary consensus for policies.

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    Article provided by IEF in its journal Hacienda Pública Española/Review of Public Economics.

    Volume (Year): 201 (2012)
    Issue (Month): 2 (June)
    Pages: 113-132

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    Handle: RePEc:hpe:journl:y:2012:v:201:i:2:p:113-132.
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    1. Olivier Blanchard & Jordi Galí, 2010. "Labor Markets and Monetary Policy: A New Keynesian Model with Unemployment," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(2), pages 1-30, April.
    2. Currie, Alison & Shields, Michael A. & Price, Stephen Wheatley, 2007. "The child health/family income gradient: Evidence from England," Journal of Health Economics, Elsevier, vol. 26(2), pages 213-232, March.
    3. Anne Case & Angela Fertig & Christina Paxson, 2004. "The Lasting Impact of Childhood Health and Circumstance," Working Papers 246, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
    4. Trannoy, A & Tubeuf, S & Jusot, F & Devaux, M, 2008. "Inequality in Opportunities in Health in France: A first pass," Health, Econometrics and Data Group (HEDG) Working Papers 08/24, HEDG, c/o Department of Economics, University of York.
    5. FLEURBAEY, Marc & SCHOKKAERT, Erik, 2007. "Unfair inequalities in health and health care," CORE Discussion Papers 2007090, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    6. van Kippersluis, Hans & Van Ourti, Tom & O'Donnell, Owen & van Doorslaer, Eddy, 2009. "Health and income across the life cycle and generations in Europe," Journal of Health Economics, Elsevier, vol. 28(4), pages 818-830, July.
    7. Contoyannis, Paul & Forster, Martin, 1999. "The distribution of health and income: a theoretical framework," Journal of Health Economics, Elsevier, vol. 18(5), pages 603-620, October.
    8. Van Ourti, Tom & van Doorslaer, Eddy & Koolman, Xander, 2009. "The effect of income growth and inequality on health inequality: Theory and empirical evidence from the European Panel," Journal of Health Economics, Elsevier, vol. 28(3), pages 525-539, May.
    9. van Kippersluis, Hans & O'Donnell, Owen & van Doorslaer, Eddy & Van Ourti, Tom, 2010. "Socioeconomic differences in health over the life cycle in an Egalitarian country," Social Science & Medicine, Elsevier, vol. 70(3), pages 428-438, February.
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