IDEAS home Printed from
   My bibliography  Save this paper

On the Long-Run Equilibrium Relationship among Health Care Expenditures, Public Pension and Social Insurance Burden Rate in Japan


  • Kumagai, Narimasa


Despite a decrease in the number of working generations supporting Japan's social security system, the relationship between public pension benefits and health care expenditures since the inception of universal health insurance system has not been explored. We obtained one stable long-run equilibrium relationship among those three variables over the period from 1966 to 2002. We employed the forecast error variance decomposition to examine the determination of social insurance burden rate. It is found that health care shock was important for the long-run determination of social insurance burden rate. Because it appears that a free health service system for the elderly (health care shock) caused the increase in the doctor's consultation, we estimated the health care function to analyze price policy in the health care sector. We finally accepted the dynamic OLS model with lead lags as an aggregated health care function. The price elasticity of health care has declined in absolute value since the universal health insurance system started, and it has been around 0.6 since the early 1980s. The policy which eliminated health care fees for the elderly in the 1970s was a mistake since the elderly increased their health care expenditures. The out-of-pocket expenses for health care of the elderly should have been raised in the 1970s.

Suggested Citation

  • Kumagai, Narimasa, 2009. "On the Long-Run Equilibrium Relationship among Health Care Expenditures, Public Pension and Social Insurance Burden Rate in Japan," PIE/CIS Discussion Paper 413, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hit:piecis:413

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item


    cointegration; dynamic OLS; price elasticity of health care; variance decomposition; vector error correction model;

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hit:piecis:413. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Digital Resources Section, Hitotsubashi University Library). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.