Expenditures In OECD Countries Research Articles

The nexus among CO2 emission, health expenditure and economic development in the OECD countries: New insights from a cross-sectional ARDL model.

To find a way to realize sustainable development, this paper applied a cross-sectional ARDL (CS-ARDL) method to explore the interaction between carbon emissions, economic development, and health care expenditure for OECD countries. Firstly, we conduct a cross-sectional test to check whether the data is confronted with this issue. Secondly, we conduct a panel unit root test and cointegration test to confirm whether the ARDL-based method is suitable for our data. Thirdly, we analyze the results and provide possible explanations. Lastly, we conduct a short-term causality test to detect the connection between different variables. The main conclusion of our study includes: 1) Health care is a necessity in OECD countries. 2) Environmental deterioration places a heavy burden on health care expenditure in OECD countries. 3) Health care expenditure of last year negatively affects health care expenditure. 4) There is a short-run causality relationship from CO2, economic development, and dependency rate of youth to health care expenditure in OECD countries. Related policy proposals are provided according to our analysis of the results.

Economic growth effects of public health expenditure in OECD countries: An empirical study using the dynamic panel threshold model

BackgroundMember countries of the Organization for Economic Co-operation and Development (OECD) have experienced a downward trend in capital and macro investment returns. Countries rely on investments in healthcare and health-related sectors to ensure continuous input and an efficient labor market. Public healthcare coverage is a social welfare policy implemented by governments, which contributes to improving human capital quality and ensuring stable economic growth. MethodsThis study employs a method that combines theoretical modeling and empirical testing examining 33 OECD countries from 2001 to 2017. We first construct a nonlinear dynamic panel threshold model to examine the impact of public health spending on economic growth. We then employ the model to empirically analyze the threshold effect of public health expenditure on economic growth, validating the effectiveness of our theoretical model. ResultsWhen the level of household consumption is below the 9.63 threshold, the effect of public health expenditure on economic growth is significantly negative (p < 0.1); however, when consumption exceeds the 9.63 threshold, the effect becomes significantly positive (p < 0.05). Similarly, when employee wages are below the 10.57 threshold, the effect of public health expenditure on economic growth is significantly negative (p > 0.1), and it becomes significantly positive when it exceeds 10.57 (p < 0.5). Finally, when the level of physical capital investment falls below the 8.73 threshold, the effect of public health expenditure on economic growth is significantly negative (p < 0.5), and it becomes significantly positive when it exceeds 8.73 (p < 0.5). The positive impact of public health expenditure on economic growth gradually strengthens as household consumption, employee wages, and per capita physical capital investment continue to rise. ConclusionsIn an economic environment with higher household consumption, employee wages, and physical capital investment, public health expenditure will significantly promote economic growth.

Analysing the Determinants of Social Expenditures in OECD Countries

Ülkelerin yaşadıkları ekonomik krizler devamında devletin ekonomi içerisindeki rolünü gündeme getirmektedir. Yaşanan krizler çok boyutlu olarak ekonomiyi etkiler. Ancak temel gösterge olarak işsizlik, gelir dağılımı bozukluğu ve büyüme oranlarındaki düşüş dikkat çekmektedir. Bu ekonomik ve sosyal sorunların önlenmesi için maliye politikası aracı olan sosyal transfer harcamaları kullanılmaktadır. Sosyal transfer harcaması devletin dar gelirli ve savunmasız hanelere yaptığı ayni ve nakdi ödemelerden oluşmaktadır. Bu çalışmada amaç sosyal transfer harcama politikalarının belirleyicilerinin üzerinden etkin bir ekonomi politikası önerisi sunmaktır. Çalışma panel veri ekonometrisi yöntem olarak kullanılmıştır. Çalışma 2007-2017 yılları arasını kapsamaktadır. İktisadi İşbirliği ve Gelişme Teşkilatı (OECD) üye ülkeleri analize dahil edilmiştir. Sosyal transfer harcamalarının GSYH içerisindeki payı, nüfus, işsizlik, büyüme, bağımlılık oranı ve eğitim seviyesi değişken olarak alınmıştır. Çalışmanın önemli özelliği literatürde boşluk olarak görülen makro değişkenlerin sosyal transfer harcamaları üzerine etkisinin incelenmesidir. Çalışma sonucunda eğitim seviyesindeki artış ve ekonomik büyümenin sosyal transfer harcamalarını azaltıcı etkisi ortaya çıkarken, bağımlılık oranı ve işsizlikteki artışın sosyal transfer harcamalarını artırıcı yönde etkisi ortaya çıkmıştır.

Convergence of economic growth and health expenditures in OECD countries: Evidence from non-linear unit root tests.

The relationship between human capital, health spending, and economic growth is frequently neglected in the literature. However, one of the main determinants of human capital is health expenditures, where human capital is one of the driving forces of growth. Consequently, health expenditures affect growth through this link. In the study, these findings have been attempted to be empirically tested. Along this axis, health expenditure per qualified worker was chosen as an indicator of health expenditure, and output per qualified worker was chosen as an indicator of economic growth. The variables were treated with the convergence hypothesis. Due to the non-linear nature of the variables, the convergence hypothesis was carried out with non-linear unit root tests. The analysis of 22 OECD countries from 1976 to 2020 showed that health expenditure converged for all countries, and there was a significant degree of growth convergence (except for two countries). These findings show that health expenditure convergence has significantly contributed to growth convergence. Policymakers should consider the inclusiveness and effectiveness of health policies while making their economic policies, as health expenditure convergence can significantly impact growth convergence. Further research is needed to understand the mechanisms behind this relationship and identify specific health policies most effective in promoting economic growth.

Smooth structural changes and common factors in nonstationary panel data: an analysis of healthcare expenditures†

This article suggests new panel unit root tests that allow for multiple structural breaks and control for cross-correlations in the panel. Breaks are modeled with a Fourier function, which allows for smooth or gradual change rather than abrupt breaks. Cross-correlations are corrected by using the PANIC procedure. The simulations show that our tests have good size and power properties and perform reasonably well when the nature of breaks or the factor structure is unknown. The new panel unit root tests support fresh evidence on the persistence of healthcare expenditures in OECD countries.

The determinants of social expenditures in OECD countries

The determinants of social expenditures in OECD countries

The effect of carbon dioxide emission, GDP per capita and urban population on health expenditure in OECD countries: a panel ARDL approach

ABSTRACT The dramatic growth in health expenditures is an important health policy concern worldwide. Therefore, understanding the factors that increase health expenditures provides policy makers with evidence for decision-making. We aim to examine long-term effects of carbon dioxide emission, urbanization rate and GDP per capita on health expenditures. This study investigates the effect of carbon dioxide emission, urban population, and GDP per capita on health expenditure for 21 OECD countries over the period 1992–2018. Panel ARDL Approach and Gengenbach, Urbain and Westerlund Panel Co-integration Test have been used in the article. Test results indicate the long-run relationship among health expenditure and carbon dioxide emission, urban population, and GDP per capita. Effect of carbon dioxide emission (CO2), urban population, and GDP per capita is significant and positive on health expenditure. Rapid economic growths of OECD countries recently and environmental pollution have increased health expenditures in the long term.

EVALUATION OF HEALTH INDICATORS OF OECD COUNTRIES BY STOCHASTIC FRONTIER ANALYSIS

Purpose: This study aims to determine the factors affecting the change of health expenditures in OECD countries and revealing their effect levels. Methodology: Within the scope of the study, the effects of health status indicators on health expenditure per capita were investigated by using Stochastic Frontier Analysis (SFA) method with 2016 data obtained from OECD health statistics. Findings: The extent to which health status indicators affect the change in health expenditures was tried to be calculated with the Least-Squares and Maximum Likelihood methods of the SFA. According to the estimation results, we observed that inefficiency reason in all analyses was due to a 99,99 % of random error. It was found in the analysis that there was a positive relationship between health expenditure per capita, life expectancy at birth, and the number of nurses per thousand people, and a negative relationship between infant mortality. Originality: This study demonstrates the factors that have an impact on the health-care costs included in the health indicators, as well as the inter-relationship between such health indicators within the OECD countries. It is considered that familiarity with the inter-relationships among health indicators will be of great assistance to health-policymakers and will contribute to the body literature in the context of much more efficient plan preparation.

Environmental protection and performance: A bi-directional assessment

This research quantitatively investigates the bi-directional relationships between environmental protection expenditure and environmental performance by utilizing annual data for 34 countries during 2005–2017 and employing panel approaches like the cointegration test and VECM estimation. Our benchmark results support long-run bi-directional relationships between environmental protection expenditure and performance, but present no links between both variables in the short run. Pedroni's cointegration tests for sub-samples again confirm that both variables move together in the long run for all sample countries, but the panel VECM results support that while there are bi-directional relationships between variables among non-OECD countries, there are only unidirectional relationships from environmental performance to environmental expenditure in OECD countries. Our study offers important implications for policymakers that a better reallocation of environmental expenditure and long-term investment in environmental protection are critical for improving environmental performance.

Forecasting future dental health expenditures: Development of a framework using data from 32 OECD countries.

ObjectiveTo (1) develop a framework for forecasting future dental expenditures, using currently available information, and (2) identify relevant research and data gaps such that dental expenditure predictions can continuously be improved in the future.MethodsOur analyses focused on 32 OECD countries. Dependent on the number of predictors, we employed dynamic univariate and multivariate modelling approaches with various model specifications. For univariate modelling, an auto‐regressive (AR) dynamic model was employed to incorporate historical trends in dental expenditures. Multivariate modelling took account of historical trends, as well as of relationships between dental expenditures, dental morbidity, economic growth in terms of gross domestic product and demographic changes.ResultsEstimates of dental expenditures varied substantially across different model specifications. Models relying on dental morbidity as one of the predictors performed worst regardless of their specification. Using the best‐fitted model specification, that is the univariate second‐order autoregression [AR(2)], the forecasted dental expenditures across 32 OECD countries amounted to US$316bn (95% forecasted interval, FI: 258‐387) in 2020, US$434bn (95%FI: 354‐532) in 2030 and US$594bn (95%FI: 485‐728) in 2040. Per capita spending in 2040 was forecasted to be highest in Germany (US$889, 95%FI: 726‐1090) and lowest in Mexico (US$52, 95%FI: 42‐64).ConclusionsThe present study demonstrates the feasibility and challenges in predicting dental expenditures and can serve as a basis for improvement towards more sustainable and resilient health policy and resource planning. Within the limitations of available data sources, our findings suggest that dental expenditures in OECD countries could increase substantially over the next two decades and vary considerably across countries. For more accurate estimation and a better understanding of determinants of dental expenditures, more comprehensive data on dental spending and dental morbidity are urgently needed.

The dynamic association between healthcare spending, CO2 emissions, and human development index in OECD countries: evidence from panel VAR model

The present research aims to inspect the bidirectional association among healthcare expenditures, carbon dioxide (CO2) emissions, and human development index (HDI). For this purpose, we employ a balanced panel data set of 33 OECD countries for the period 2006–2016. A newly developed econometric approach known as panel vector autoregression based on the generalized method of moments estimations is employed to test this relationship. The key empirical findings reveal that (1) all of the three main variables namely healthcare expenditures, CO2 emissions, and HDI exhibit a causal relationship, (2) there exists bidirectional causality between healthcare expenditures and CO2 emissions which suggests that CO2 emissions significantly escalate the healthcare expenditures in OECD countries. Likewise, healthcare investments also increase emissions due to higher use of energy, (3) positive bidirectional causation between healthcare expenditures and HDI entails that investments in health infrastructure lead to improvement in the overall quality of living in these countries. Moreover, a higher HDI reinforces the governments to increase their healthcare spending, and (4) there is a unidirectional negative causality between CO2 emissions and HDI which implies that carbon emissions significantly deteriorate human health and wellness in these countries. Based on these empirical outcomes, the policy prescriptions are discussed for the relevant authorities to curtail emission and enhance the quality of living of the masses.

Health insurance as a state institution: The effect of single-payer insurance on expenditures in OECD countries.

A growing literature in comparative political economy and health economics has argued several cost-saving effects of a single-payer healthcare system. Despite this growing evidence, there has been no large-scale empirical examination of whether such an effect exists cross-nationally over time. This paper serves as the first attempt to find and calculate the extent to which healthcare spending is affected by the utilization of a single-payer scheme. I introduce an original dataset for OECD countries that measures when and where systems that qualify as single-payer exist, and employ it to test whether significant differences exist in health expenditures. Results demonstrate a significant difference between single- and multi-payer system expenditures. I estimate the utilization of a single-payer system is associated with decreased expenditure equal to 0.750 percentage-points of a nation's GDP. This would equate to the United States saving well over $1.5 trillion over ten years.

Διερεύνηση της Εισοδηματικής Ελαστικότητας των Δαπανών Υγείας στις Χώρες του ΟΟΣΑ

Introduction: The long-term increase in both health expenditure as a whole and its individual components (hospital, pharmaceutical expense) at rates higher than Gross Domestic Product (GDP) has garnered the interest of the scientific community. At the same time, policies for restraining health expenditure have been adopted internationally. An important tool for establishing health policies is the knowledge and the determination of the income elasticity of health expenditure. Aim: To investigate the income elasticity of health expenditure for OECD countries. Specifically, to review the price of income elasticity of health expenditure cal- culated in international studies conducted over the last decades for OECD countries. Method: A systematic review of papers published up until July 2018 was conducted. Search was performed on PubMed, Medline, Scopus, Science Direct and OECD. The criteria for inclusion in this review, which follows Prisma Checklist guidelines, were the study and calcula- tion of the income elasticity of health expenditure in OECD countries using time-series, cross-sectional data or a combination of them. Results: Only 21 of the scientific papers retrieved met the criteria for inclusion in this review. Twelve of them, using panel data and calculating the income elas- ticity less than one, ranked the health good in normal goods, while the others, using either time-series or cross-sectional data, ranked it in the luxury goods. Conclusions: Earlier studies before 2000, using either cross-sectional or time-series data, led to the con- clusion that health is a luxury asset, while recent stud- ies, using panel data, which is the most reliable method, concluded that health is classified as a normal good.

Economic growth and R&D expenditures in selected OECD countries: Is there any convergence?

The economic growth of nations is strongly associated with rising R&D expenditures. The present study therefore endeavours to examine the stylized patterns of evolution of R&D expenditures (R&D expenditures as a share of GDP) along the development course in 18 OECD countries for the period 1981–2012. Empirical findings of feasible generalized least square model highlight that as economic growth proceeds, R&D as a share of GDP also shows a rise in OECD nations. The study also analyzes the long-term growth trends and structure of research and development (R&D) expenditures in OECD nations for the period 1981–2012. Further, the study analyzes another important issue, namely whether OECD economies are converging/diverging in their R&D activities over the course of time. To this end, σ-convergence has been applied to examine this issue. Findings of σ-convergence highlight declining coefficient of variation (convergence) in R&D intensities as well as R&D expenditure in OECD countries for 1981–2012.

Pharmaceutical expenditure and total health-care expenditure in OECD countries and China: bidirectional Granger causality on the basis of health level

ABSTRACT Background: Previous studies have ignored the bidirectional causality and the heterogeneity of health level. This study explored the bidirectional causality between pharmaceutical expenditure (PE) and total health-care expenditure (Total HCE) considering the health level for effective health investment and national health improvement. Methods: Based on the panel data on PE and Total HCE in 32 OECD countries and China, the Granger causality test was applied. Countries were divided into low- and high-health-level (LH and HH) groups according to their life expectancies. Results: A 1% increase in the growth rate of per capita PE boosted a 0.11% increase in that of per capita Total HCE of the following year in HH group, whereas no such causality existed in LH group. A 1% increase in the growth rate of per capita Total HCE boosted a 0.46% increase in that of the per capita PE of the following year in LH group, whereas no such causality existed in HH group. Conclusion: High-health-level countries should continue to increase the health investment by promoting rational PE growth such as expanding insurance coverage for innovative medicine for health improvement. Low-health-level countries should take optimizing policy to increase health investment in pharmaceutical for medicine accessibility and national health.

The associations of multimorbidity with the sum of annual medical and long-term care expenditures in Japan

BackgroundThe occurrence of multimorbidity (i.e., the coexistence of multiple chronic diseases) increases with age in older adults and is a growing concern worldwide. Multimorbidity has been reported to be a driving factor in the increase of medical expenditures in OECD countries. However, to the best of our knowledge, there is no published research that has examined the associations between multimorbidity and either long-term care (LTC) expenditure or the sum of medical and LTC expenditures worldwide. We, therefore, aimed to examine the associations of multimorbidity with the sum of medical and LTC expenditures for older adults in Japan.MethodsMedical insurance claims data for adults ≥75 years were merged with LTC insurance claims data from Kashiwa city, a suburb in the Tokyo metropolitan area, for the period between April 2012 and September 2013 to obtain an estimate of medical and LTC expenditures. We also calculated the 2011 updated and reweighted version of the Charlson Comorbidity Index (CCI) scores. Then, we performed multiple generalized linear regressions to examine the associations of CCI scores (0, 1, 2, 3, 4, or ≥ 5) with the sum of annual medical and LTC expenditures, adjusting for age, sex, and household income level.ResultsThe mean sum of annual medical and LTC expenditures was ¥1,086,000 (US$12,340; n = 30,042). Medical and LTC expenditures accounted for 66 and 34% of the sum, respectively. Every increase in one unit of the CCI scores was associated with a ¥257,000 (US$2920); 95% Confidence Interval: ¥242,000, 271,000 (US$2750, 3080) increase in the sum of the expenditures (p < 0.001; n = 29,915).ConclusionsUsing a merged medical and LTC claims dataset, we found that greater CCI scores were associated with a higher sum of annual medical and LTC expenditures for older adults. To the best of our knowledge, this is the first study to examine the associations of multimorbidity with LTC expenditures or the sum of medical and LTC expenditures worldwide. Our study indicated that the economic burden on society caused by multimorbidity could be better evaluated by the sum of medical and LTC expenditures, rather than medical expenditures alone.

Firm Size and Public Policies for Business R&amp;D Expenditures in OECD Countries

Firm Size and Public Policies for Business R&amp;D Expenditures in OECD Countries

Convergence and determinants of health expenditures in OECD countries

This study examines the trend and determinants of health expenditures in OECD countries over the 1975-2004 period. Based on recent developments in the economic growth literature we propose and test the hypothesis that health care expenditures in countries of similar economic development level may converge. We hypothesise that the main drivers for growth in health care costs include: aging population, technological progress and health insurance. The results reveal no evidence that health expenditures among OECD countries converge. Nevertheless, there is evidence of convergence among three sub-groups of countries. We found that the main driver of health expenditure is technological progress. Our results also suggest that health care is a (national) necessity, not a luxury good as some other studies in this field have found.

Life expectancy effects of public and private health expenditures in OECD countries 1970–2012: Panel time series approach

Relationships between life expectancy at birth, public and private health expenditures are analysed with econometric panel time series methods for 34 OECD countries between the years 1970 and 2012. The countries are grouped in three clusters depending on size of public health expenditure as a share of GDP. This gives us the possibility to test whether private and public health expenditures have different impacts on life expectancy at different levels of public expenditure as a share of GDP. Panel unit root tests show that all series in clusters are not difference stationary. Co-integration is found for countries with high public expenditure as a share of GDP. The results, augmented with panel VAR models and impulse response analysis, stress the importance of the positive relationship between public health expenditures and life expectancy. Additional results based on private health expenditure as a share of GDP show also the importance of private expenditures for life expectancy, although these are, at the same time, also driven up by public health expenditures.

Determinants of health expenditure in OECD countries: A decision tree model.

Objective:This study aimed to identify the major variables in the estimation of health expenditure in OECD member countries with the decision tree method and to categorize the member countries by health expenditure.Methods:The study population comprised the 2014 data of the 35 OECD countries. In the study, health expenditure as a share of gross domestic product was the dependent variable while gross domestic product per capita, percentage of total population covered by public and private insurance, out-of-pocket health expenditure as percentage of total expenditure on health, age dependency ratio, life expectancy at birth, number of hospitals per million population, number of physicians per 1000 population/head counts, pharmaceutical sales and perceived health status were designated as independent variables. The decision tree model was constructed with the CART algorithm using the Orange data mining software package.Results:In the study, GDP per capita, life expectancy at birth, age dependency ratio, number of hospitals and percentage of the population with a bad perceived health status were identified as the major variables in the estimation of health expenditure. OECD countries were categorized in 6 groups according to the decision tree model. According to the CART algorithm used in the model, the classification accuracy rate and the precision of estimation were computed as 80.56% and 81.25%, respectively.Conclusion:The study results revealed that the most important determinant for estimating the share of GDP allocated to health expenditure was GDP per capita. Future studies should be conducted with the inclusion of different variables in the model.