Effects of Public Healthcare Budget Cuts on Life Satisfaction in Spain

Abstract

This paper investigates the impact the changes in the health care budget had on the reported levels of satisfaction in Spain during the recent economic crisis. We match individual-level data from six different waves of the European Social Survey (ESS) with regional-level expenditures in both public and private health care services between 2008 and 2018. Specifically, we analyze the effect of the three main public health care spending components (hospital and specialized health care, pharmacy and primary health care) and the aggregate private expenditures on health care borne directly by households, i.e., out-of-pocket payments. The results provide clear evidence in favor of the contention that hospital and specialized health care is positively related to life satisfaction. This result is robust as it is not affected by cyclical fluctuations of the economy nor by individual preferences. In contrast, political preferences do seem to play a role in determining how government expenditures in pharmacy and primary services influence the levels of well-being of its citizens.