Age Effects on Health Expenditures: a Global View

Abstract

We study age-specific effects of population on health expenditures across 165 countries, with reference to their income statuses, from 1995 to 2014. After preparing the data for a valid estimation through principal component analysis, we utilized the Generalized Method of Moments estimation to investigate the age effects. The results indicate that the age-specific effects of population on health expenditures are significant as well as other effects stimulating health expenditures: country’s overall economic condition, health system and technology, and urbanization effects. We have found that the “old age” fraction of the country’s population, which in this study is considered 45 years or above (as a new definition of “old” in terms of health expenditures), is the most effective group which affects health expenditures in a positive way with point estimated semi-elasticity of 0.19 to 0.31. “young age” fraction of population (ageing from time of birth to 19 years old) also affects the health expenditures after the “old age” in magnitude. Respectively, the least effective group on health expenditures is the group ageing from 20 to 29 years, and after that, the group ageing 30 to 44 years, which both affect health expenditures in a positive slither way.