The Effect of Health Expenditure on Life Expectancy

Abstract

With this paper, we aim to analyse the effect of health expenditures and funding on the national life expectancy of OECD countries. We considered the influence of exogenous factors such as health expenditure, GDP per capita and productivity, population, infant mortality rates, potential years of life lost, deaths from cancer and the suicide rate. We used secondary data gathered between 2005 to 2018 from the annual reports of the OECD, the IMF and the World Bank. To derive the empirical results, econometric models such as linear regression, random effect, fixed effect, Hausman - Taylor Regression, GMM Model - Arellano Bond Estimation, Generalized Estimating Equations (GEE Model) and linear trend analysis through the historical and comparative method were used. Results show that health expenditures positively affect the national life expectancy of OECD countries, showing the impact and causality of national longevity in OECD countries.