Abstract
We use individual level data from eight waves of the China Health and Nutrition Survey during 1991–2011 to investigate age profiles of health expenditure for rural and urban residents in the People's Republic of China (PRC). Employing a two-part model, we find that health expenditure of rural residents is averagely 33% lower than that of urban residents and age-expenditure profile is much steeper in urban areas than in rural areas. However, there is no evidence that the health status of the rural elderly is better than that of the urban elderly. The findings imply that health spending of the rural elderly may increase more during the process of rural–urban integration. In addition, we find a significant difference in age-expenditure profiles across time. Compared with expenditure during 1991–2000, the estimated age-expenditure profile becomes steeper during 2004–2011 in both urban and rural areas.
Highlights
With rapid population aging, there is growing concern about its impact on health care expenditure in the People’s Republic of China (Peng 2011; Chen, Eggleston, and Li 2011)
Most studies on the United States (US) and other Organisation for Economic Co-operation and Development (OECD) countries conclude that population aging has not been a significant driver of health spending in contrast to growing demand for health care and rising costs due to technology progress in the health care sector, which have had a more significant influence (Newhouse 1992, Getzen 1992, Gerdtham and Jonsson 2000, Baltagi and Moscone 2010)
Employing a two-part model, we find that health care expenditure of rural residents is lower than that of urban residents in all age groups
Summary
There is growing concern about its impact on health care expenditure in the People’s Republic of China (Peng 2011; Chen, Eggleston, and Li 2011). Most studies on the United States (US) and other Organisation for Economic Co-operation and Development (OECD) countries conclude that population aging has not been a significant driver of health spending in contrast to growing demand for health care and rising costs due to technology progress in the health care sector, which have had a more significant influence (Newhouse 1992, Getzen 1992, Gerdtham and Jonsson 2000, Baltagi and Moscone 2010) Another line of studies states that health expenditures are mainly driven by time to death, age per se (Zweifel, Felder, and Meiers 1999; Seshamani and Gray 2004). Population aging and urbanization will likely continue to drive health expenditure It is worth noting, that the growth of health spending has different meanings in the PRC than in OECD countries. While developed nations struggle with rising health spending, increased expenditure in the PRC during urbanization is encouraging to a large extent, as more people receive much-needed health care
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