Threshold Effect of the Government Intervention in the Relationship Between Business Cycle and Population Health: Evidence From China.

Kuang-Cheng Chai,Zhen-Xin Cui,Yang-Lu Ou,Yang Yang,Ke-Chiun Chang

doi:10.3389/fpubh.2021.689870

Kuang-Cheng Chai, Zhen-Xin Cui + Show 3 more

Open Access

https://doi.org/10.3389/fpubh.2021.689870

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Abstract

China is an emerging country, and government intervention is always considered as an important part of the solutions when people facing challenges in China. Under the impact of the coronavirus disease 2019 (COVID-19) epidemic and the global economic downturn, the Chinese government quickly brought the epidemic under control and restored the positive economic growth through strong intervention. Based on the panel data of provincial level in China and the government intervention as the threshold variable, this paper empirically analyzed the non-linear effect of business cycle on population health by using the panel threshold regression model. The empirical results show that the impact of the business cycle on population health is significantly negative, and government intervention has a single threshold effect on the relationship between business cycle and population health. When the government intervention is below the threshold value, the business cycle has a significant negative effect on the improvement of the population health level; when the level of government intervention exceeds the threshold value, the relationship between business cycle and population health becomes significantly positive. To some extent, the conclusions of this paper can guide the formulation and revision of government health policy and help to adjust the direction and intensity of government intervention. The Chinese government and other governments of emerging countries should do more to harness the power of state intervention in their response to the business cycle.

Highlights

The coronavirus disease 2019 (COVID-19) has become a worldwide epidemic, resulting in a serious health crisis due to the large number of infected persons and high death rate [1, 2], and population health is becoming a continuing focus of concern throughout the world
This paper first uses a fixed-effect model to test the impact of business cycle on population health in China
The business cycle is defined as the gross domestic product (GDP) growth rate, and we find that the business cycle has a significantly negative impact on population health

Summary

Introduction

The coronavirus disease 2019 (COVID-19) has become a worldwide epidemic, resulting in a serious health crisis due to the large number of infected persons and high death rate [1, 2], and population health is becoming a continuing focus of concern throughout the world. Threshold Effect of Government Intervention the spread of COVID-19 and promoting the level of population health. China’s economic development has made great achievements, and along with the widening of rural medical insurance coverage, the government has done a lot of responsibility on these systems; these investments need to be backed by huge amounts of government funding. In this context, it is important to study the effect of the business cycle on population health in China and find out the appropriate level of government intervention that should be maintained in responding to the business cycle. Governments especially in emerging countries need to take actions in fighting the epidemic and steadily improve population health throughout the business cycle

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