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Social Health Insurance vs. Tax-Financed Health Systems--Evidence from the OECD

  • Wagstaff, Adam

    ()

    (The World Bank)

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    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.

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    Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4821.

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    Length: 39 pages
    Date of creation: 01 Jan 2009
    Date of revision:
    Handle: RePEc:wbk:wbrwps:4821
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    1. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 249-275, February.
    2. repec:idb:brikps:59558 is not listed on IDEAS
    3. Gruber, J. & Hanratty, M., 1994. "The Labor Market Efects of Introducing National Health Insurance: Evidence from Canada," Working papers 94-05, Massachusetts Institute of Technology (MIT), Department of Economics.
    4. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
    5. William C. Hsiao & R. Paul Shaw, 2007. "Social Health Insurance for Developing Nations," World Bank Publications, The World Bank, number 6860.
    6. Burgess, Simon & Gossage, Denise & Propper, Carol, 2003. "Competition and Quality: Evidence from the NHS Internal Market 1991-9," CEPR Discussion Papers 4026, C.E.P.R. Discussion Papers.
    7. Kleibergen, F.R. & Paap, R., 2003. "Generalized Reduced Rank Tests using the Singular Value Decomposition," Econometric Institute Research Papers EI 2003-01, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    8. van de Ven, Wynand P.M.M. & Beck, Konstantin & Van de Voorde, Carine & Wasem, Jurgen & Zmora, Irit, 2007. "Risk adjustment and risk selection in Europe: 6 years later," Health Policy, Elsevier, vol. 83(2-3), pages 162-179, October.
    9. Propper, Carol & Burgess, Simon & Green, Katherine, 2004. "Does competition between hospitals improve the quality of care?: Hospital death rates and the NHS internal market," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1247-1272, July.
    10. van de Ven, Wynand P. M. M. & Beck, Konstantin & Buchner, Florian & Chernichovsky, Dov & Gardiol, Lucien & Holly, Alberto & Lamers, Leida M. & Schokkaert, Erik & Shmueli, Amir & Spycher, Stephan & Van, 2003. "Risk adjustment and risk selection on the sickness fund insurance market in five European countries," Health Policy, Elsevier, vol. 65(1), pages 75-98, July.
    11. Cristian C. Baeza & Truman G. Packard, 2006. "Beyond Survival : Protecting Households from Health Shocks in Latin America," World Bank Publications, The World Bank, number 7120.
    12. Stephen Nickell & Luca Nunziata & Wolfgang Ochel, 2005. "Unemployment in the OECD Since the 1960s. What Do We Know?," Economic Journal, Royal Economic Society, vol. 115(500), pages 1-27, 01.
    13. Brian Bell & Richard Blundell & John Reenen, 1999. "Getting the Unemployed Back to Work: The Role of Targeted Wage Subsidies," International Tax and Public Finance, Springer, vol. 6(3), pages 339-360, August.
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