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Health Spending and Public Pension: Evidence from Panel Data

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  • Yonghong An

    (Texas A&M University)

  • Kai Zhao

    (University of Connecticut)

  • Rong Zhou

    (University of Connecticut)

Abstract

This paper empirically investigates the determinants of aggregate health expenditure in a panel of OECD countries from 1980-2005. We differ from most existing studies by testing some new determinants motivated by recent theoretical advances in the literature. We find that a one percentage increase in public pension payments per elderly person leads to approximately a 1=3 percentage increase in aggregate health spending, and this effect is significant and robust across a variety of model speci cations. A back of the envelope calculation based on this estimate suggests that the expansion of the public pension program on average accounts for approximately over one fifth of the rise in aggregate health expenditure as a share of GDP in the set of OECD countries during 1980-2005. In addition, we find that the estimated effect of GDP per capita in our model ranges from 0.66 to 0.80, which is consistent with the results from some recent studies, and thus further reinforces the finding in the literature that health care is not a luxury good. Finally, our results show that the political factors do not significantly affect aggregate health expenditure, though they have been found to be important for understanding public health spending in existing studies.

Suggested Citation

  • Yonghong An & Kai Zhao & Rong Zhou, 2014. "Health Spending and Public Pension: Evidence from Panel Data," Working papers 2014-27, University of Connecticut, Department of Economics.
  • Handle: RePEc:uct:uconnp:2014-27
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    Cited by:

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    2. Tianxu Chen, 2019. "Can Health Savings Account Reduce Health Spending?: Evidence from China," Working papers 2019-08, University of Connecticut, Department of Economics.
    3. Potrafke, Niklas, 2017. "Partisan politics: The empirical evidence from OECD panel studies," Journal of Comparative Economics, Elsevier, vol. 45(4), pages 712-750.
    4. Suisui Chen & Xintian Liu & Shuhong Wang & Peng Wang, 2023. "Regional Corruption, Foreign Trade, and Environmental Pollution," Sustainability, MDPI, vol. 15(1), pages 1-17, January.
    5. Chong Lu & Ailin Wu, 2020. "The Household Registration Threshold and Peasant Worker Decision-Making over Acquiring Urban Hukou in China," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 151(3), pages 767-792, October.
    6. Héctor Bellido & Lorena Olmos & Juan Antonio Román-Aso, 2019. "Do political factors influence public health expenditures? Evidence pre- and post-great recession," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(3), pages 455-474, April.

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    More about this item

    Keywords

    Aggregate Health Expenditure; Public Pension; Labor Supply;
    All these keywords.

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I1 - Health, Education, and Welfare - - Health

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