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Social health insurance vs. tax-financed health systems - evidence from the OECD


  • Wagstaff, Adam


This paper exploits the transitions between tax-financed health care and social health insurance in the OECD countries over the period 1960-2006 to assess the effects of adopting social health insurance over tax finance on per capita health spending, amenable mortality, and labor market outcomes. The paper uses regression-based generalizations of difference-in-differences and instrumental variables to address the possible endogeneity of a country's health system. It finds that adopting social health insurance in preference to tax financing increases per capita health spending by 3-4 percent, reduces the formal sector share of employment by 8-10 percent, and reduces total employment by as much as 6 percent. For the most part, social health insurance adoption has no significant impact on amenable mortality, but for one cause-breast cancer among women-social health insurance systems perform significantly worse, with 5-6 percent more potential years of life lost.

Suggested Citation

  • Wagstaff, Adam, 2009. "Social health insurance vs. tax-financed health systems - evidence from the OECD," Policy Research Working Paper Series 4821, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4821

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    Cited by:

    1. repec:ilo:ilowps:484593 is not listed on IDEAS
    2. Victoria Fan and William Savedoff, 2014. "The Health Financing Transition: A Conceptual Framework and Empirical Evidence - Working Paper 358," Working Papers 358, Center for Global Development.
    3. Fan, Victoria Y. & Savedoff, William D., 2014. "The health financing transition: A conceptual framework and empirical evidence," Social Science & Medicine, Elsevier, vol. 105(C), pages 112-121.
    4. repec:bla:ijhplm:v:31:y:2016:i:4:p:580-601 is not listed on IDEAS

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    Health Monitoring&Evaluation; Health Systems Development&Reform; Health Economics&Finance;

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