Share Of Gross Domestic Product Research Articles

Evaluating Different Types of Enterprise Support Programs Using Panel Firm Data: Evidence from the Mexican Manufacturing Sector

(ProQuest: ... denotes formulae omitted.)In most countries, small and medium-sized enterprises (SMEs) make up the vast majority of firms, account for a substantial share of gross domestic product, and involve the bulk of the workforce. However, SMEs often lag behind larger firms in many performance dimensions. This lag is widely believed to result from constraints that SMEs face, including decreased access to finance, weak managerial and workforce skills, an inability to exploit scale economies in production, and imperfect information about market opportunities, new technologies, and methods of organization.In Mexico, microenterprises and SMEs make up 99 percent of firms, employ about 64 percent of the workforce, and account for more than 40 percent of GDP. Given the importance of SMEs in the economy, governments in Mexico over the past twenty years have established a wide variety of SME support programs. How effective these SME programs have been in achieving their objectives is unclear. In Mexico, impact evaluations of SME programs are rare. Most evaluations are qualitative in nature and narrow in scope, usually measuring beneficiary satisfaction with either support services or program coverage.This paper evaluates SME support programs in Mexico using a panel of firm-level data for two groups of firms-a treatment group that participated in SME programs and a control group that did not. The panel data have been created by linking SME program participation information to a large panel of annual industrial surveys (1994-2005) maintained by Mexico's National Institute of Statistics and Geography.The panel data provide an opportunity to address several issues that have plagued impact evaluations of SME programs in most countries, including Mexico. First, asking program participation questions in the firm survey allows the identification of firms that have never participated in any program and firms that have participated in different types of SME support programs such as business development services (BDS) or programs to support research and development (R&D).1 Second, the availability of multiple years of information on the characteristics and performance of participant firms-both before and after program participation-allows us to estimate the impacts of support programs that address selection biases arising from differences between the treatment and control groups in observable attributes and in unobserved heterogeneity. Our findings suggest that program participation in certain types of BDS and R&D support programs is associated with a higher value added per worker and increases in employment and exports. The positive impact associated with firm participation is strongest and most robust in the R&D support programs, which include the Sector Promotions Program (PROSEC) of the Ministry of Economy and the Fiscal Incentives and Technological Innovation (FITI) program of the National Science and Technology Council. These programs showed positive and statistically significant impacts on firm performance, ranging from increases of 9-13 percent on sales-and, in the case of PROSEC, increases of 12 percent in value added per worker and 10 percent in production per worker. Both R&D programs increased exports between 16 and 18 percent. The results also indicate that some outcomes, such as employment and value added per worker, showed positive effects only after the third or fourth year of program participation, although the effect increases as time goes on. As for BDS programs, we estimate positive effects on sales, fixed assets, and productivity measures from the National Environmental Audit Program (PNAA). We were unable to identify positive effects of this program on other outcomes or positive effects of the Comprehensive Quality and Modernization Program for Training the Industrial Workforce (CIMO-PAC).An Overview of SME Programs in MexicoThe Mexican federal government supports the development and competitiveness of Mexican firms by improving the overall business environment and through interventions to support individual firms or groups of firms, especially SMEs. …

Evaluating Different Types of Enterprise Support Programs Using Panel Firm Data: Evidence from the Mexican Manufacturing Sector

Evaluating Different Types of Enterprise Support Programs Using Panel Firm Data: Evidence from the Mexican Manufacturing Sector Gladys López-Acevedo (bio) and Mónica Tinajero-Bravo (bio) In most countries, small and medium-sized enterprises (SMEs) make up the vast majority of firms, account for a substantial share of gross domestic product, and involve the bulk of the workforce. However, SMEs often lag behind larger firms in many performance dimensions. This lag is widely believed to result from constraints that SMEs face, including decreased access to finance, weak managerial and workforce skills, an inability to exploit scale economies in production, and imperfect information about market opportunities, new technologies, and methods of organization. In Mexico, microenterprises and SMEs make up 99 percent of firms, employ about 64 percent of the workforce, and account for more than 40 percent of GDP. Given the importance of SMEs in the economy, governments in Mexico over the past twenty years have established a wide variety of SME support programs. How effective these SME programs have been in achieving their objectives is unclear. In Mexico, impact evaluations of SME programs are rare. Most evaluations are qualitative in nature and narrow in scope, usually [End Page 1] measuring beneficiary satisfaction with either support services or program coverage. This paper evaluates SME support programs in Mexico using a panel of firm-level data for two groups of firms—a treatment group that participated in SME programs and a control group that did not. The panel data have been created by linking SME program participation information to a large panel of annual industrial surveys (1994–2005) maintained by Mexico’s National Institute of Statistics and Geography. The panel data provide an opportunity to address several issues that have plagued impact evaluations of SME programs in most countries, including Mexico. First, asking program participation questions in the firm survey allows the identification of firms that have never participated in any program and firms that have participated in different types of SME support programs such as business development services (BDS) or programs to support research and development (R&D).1 Second, the availability of multiple years of information on the characteristics and performance of participant firms—both before and after program participation—allows us to estimate the impacts of support programs that address selection biases arising from differences between the treatment and control groups in observable attributes and in unobserved heterogeneity. Our findings suggest that program participation in certain types of BDS and R&D support programs is associated with a higher value added per worker and increases in employment and exports. The positive impact associated with firm participation is strongest and most robust in the R&D support programs, which include the Sector Promotions Program (PROSEC) of the Ministry of Economy and the Fiscal Incentives and Technological Innovation (FITI) program of the National Science and Technology Council. These programs showed positive and statistically significant impacts on firm performance, ranging from increases of 9–13 percent on sales—and, in the case of PROSEC, increases of 12 percent in value added per worker and 10 percent in production per worker. Both R&D programs increased exports between 16 and 18 percent. The results also indicate that some outcomes, such as employment and value added per worker, showed positive effects only after the third or fourth year of program participation, although the effect increases as time goes on. As for BDS programs, we estimate positive effects [End Page 2] on sales, fixed assets, and productivity measures from the National Environmental Audit Program (PNAA). We were unable to identify positive effects of this program on other outcomes or positive effects of the Comprehensive Quality and Modernization Program for Training the Industrial Workforce (CIMO-PAC). An Overview of SME Programs in Mexico The Mexican federal government supports the development and competitiveness of Mexican firms by improving the overall business environment and through interventions to support individual firms or groups of firms, especially SMEs. Between 2001 and 2006, the Mexican government invested the equivalent of US$13 billion in approximately 3.7 million SMEs (World Bank 2010). Several agencies in Mexico provide SME support. The Ministry of Economy is first with regard to coverage...

Explaining Low Redistributive Impact in Bolivia

This article analyzes the fiscal incidence of cash and in-kind transfers, taxes, and subsidies in Bolivia. Between 2007 and 2009, social spending as a share of gross domestic product rose by about three percentage points. In spite of this, fiscal policy in Bolivia has shown a low redistributive impact. The weak impact is mainly due to the presence of significant leakages in transfers to the nonpoor and to the small size of per beneficiary transfers. The impact of fiscal policy on poverty and income inequality could increase with better targeting to the poor, larger per capita benefits, and an increase in coverage and progressivity of the tax system.

Universal Coverage for Primary Health Care Is a Wise Investment

We aimed to provide systemic, empirical evidence on the coverage expansion of primary health care (PHC) linking to good health in low- and middle-income countries. We conducted a pooled, cross-sectional analysis using the 2011 World Health Statistics for World Health Organization Member States at low- and middle-income levels (n = 102). With life expectancy, infant mortality, and under-5 mortality as health indicators, we examined the effect of service coverage rate using variables under 2 domains: health expenditure and PHC (public health provision, primary care access). Our results indicated that after controlling for gross national income per capita, higher total health expenditure as share of gross domestic product was associated with shorter life expectancy (β = -0.99; P = .014), higher infant mortality (β = 1.65; P = .155), and under-5 mortality (β = 4.82; P = .020). Multivariate analysis showed higher coverage of public health services was significantly associated with improved population health. Making public health and primary care services accessible and be used by everyone is the wise means toward improved health.

How Important are Exports and Foreign Direct Investment for Economic Growth in the People's Republic of China?

The global financial crisis and the recent growth slowdown in the People’s Republic of China (PRC) have led to questions about the sustainability of the PRC’s growth. The commonly used argument is that the PRC is too dependent on external demand and that it needs to rebalance its economy toward domestic consumption. However, conventional measures of external demand — share of net exports and exports as a share of gross domestic product (GDP) — are biased and do not accurately measure the contribution of external demand to GDP growth. In this paper, the authors propose two measures that provide a more accurate estimate of the vulnerability of the PRC economy to external shocks, in the form of sudden drops in exports and foreign direct investment (FDI). Based on their findings, the authors conclude that the PRC economy remains highly dependent on external demand in the form of exports and FDI, and rebalancing the economy toward domestic demand has not yet been achieved.

Tourism's Contribution to Economic Growth: A Global Analysis for the First Decade of the Millennium

The paper reviews the various methods and tourism development proxy variables used to measure the impact of tourism on economic growth. The growth decomposition methodology is employed with data for 174 countries covering 2000 to 2010 to measure the impact of tourism on a country-by-country basis. Tourism's contribution to economic growth is highest in Africa, Asia and Latin America and the Caribbean. It is slightly negative in Europe, North America and Oceania. The paper also investigates the factors that influence tourism's contribution to growth. The results show that this contribution is higher in those economies where tourism accounts for a higher share of gross domestic product (GDP). The implications and limitations of the growth decomposition methodology are also discussed.

Operations Research (OR) in Service Industries: A Comprehensive Review

The share of gross domestic product from the service industry reflects the competitiveness of a nation; the service industry in the USA accounts for around 80% of its gross domestic product, and it has been increasing gradually. Continual innovations and advances in enabling technologies for the service industry are crucial for developed countries to sustain their leading positions in the globalized economy. To clarify future research directions of operations research (OR) in the service industry, the state of art of OR has been examined systematically, the new requirements of OR are identified for its applications in service industries in comparison with those in manufacturing industries, and the limitations of existing methodologies and tools have been discussed. This paper was intended to provide an updated review on how OR has been applied in the service sector in recent years and what directions the study of OR will be carried forward in the near future. Under a proposed research framework, recent OR‐related articles were collected from 17 leading OR journals and classified into the five most active sectors, that is, transportation and warehousing, information and communication, human health and social assistance, retails and wholesales, and financial and insurance services. The conclusions on the limitations of existing studies and the demanding ORs in the service have been drawn from our summaries and observations from a comprehensive review in this field. Copyright © 2013 John Wiley & Sons, Ltd.

Hospital Payment Based On Diagnosis-Related Groups Differs In Europe And Holds Lessons For The United States

England, France, Germany, the Netherlands, and Sweden spend less as a share of gross domestic product on hospital care than the United States while delivering high-quality services. All five European countries have hospital payment systems based on diagnosis-related groups (DRGs) that classify patients of similar clinical characteristics and comparable costs. Inspired by Medicare's inpatient prospective payment system, which originated the use of DRGs, European DRG systems have implemented different design options and are generally more detailed than Medicare's system, to better distinguish among patients with less and more complex conditions. Incentives to treat more cases are often counterbalanced by volume ceilings in European DRG systems. European payments are usually broader in scope than those in the United States, including physician salaries and readmissions. These European systems, discussed in more detail in the article, suggest potential innovations for reforming DRG-based hospital payment in the United States.

European Defence Technological and Industrial Base: Macro and Micro Economic Evidence

The relative economic importance of the defence sector in the economy is declining, which is confirmed by data on military expenditures as a share of government expenditures, on military expenditures as a share of gross domestic product, and on military personnel as a share of the total labour force. The unique in-depth surveys in the Slovenian defence sector enterprises shows that the production capacities and employees in enterprises in the defence sector have above average productivity, but are less profitable due to higher costs. Most enterprises do not develop double-use products, i.e. for military and civil purposes, and as well they have not been engaged as sub-contractors in public procurements. Most enterprises claim that the size of the enterprise and even more the size of the country do matter in the defence-supply chain, as well as that cooperation and networking with foreign enterprises in the defence sector provide opportunities for survival and future development. These enterprises would welcome an institution that would monitor and provide information to the defence industry, and coordinate and provide guidelines for further development.

National Health Spending In 2011: Overall Growth Remains Low, But Some Payers And Services Show Signs Of Acceleration

In 2011 US health care spending grew 3.9 percent to reach $2.7 trillion, marking the third consecutive year of relatively slow growth. Growth in national health spending closely tracked growth in nominal gross domestic product (GDP) in 2010 and 2011, and health spending as a share of GDP remained stable from 2009 through 2011, at 17.9 percent. Even as growth in spending at the national level has remained stable, personal health care spending growth accelerated in 2011 (from 3.7 percent to 4.1 percent), in part because of faster growth in spending for prescription drugs and physician and clinical services. There were also divergent trends in spending growth in 2011 depending on the payment source: Medicaid spending growth slowed, while growth in Medicare, private health insurance, and out-of-pocket spending accelerated. Overall, there was relatively slow growth in incomes, jobs, and GDP in 2011, which raises questions about whether US health care spending will rebound over the next few years as it typically has after past economic downturns.

Health system strengthening and the importance of public investment: a study of National Rural Health Mission in Bihar

Description of the problem (Max. 100 words): Chronic under-investment in government health systems since 1990s has led to significant weakening of the systems and crippled its ability to deliver good quality health care. Through the introduction of National Rural Health Mission, there were efforts to increase public spending in health and strengthen health systems in rural areas. However, considerable amount of funds remained under-utilised initially. It was argued that further increase in spending is unwarranted as the public health system does not have the capacity to absorb funds. The present study is an attempt to draw linkages between system strengthening and fund absorption capacity to argue that consistent investment can only make health systems stronger, which in turn allows the system to absorb more funds. Methods (Min.100 words & Max. 150 words) The attempt here is to track fund flow and fund absorptive capacity under NRHM at various levels starting from state to district and subsequently to blocks and understand reasons of under-spending and study the various aspects of quality of spending at a district in Bihar. Public expenditure data obtained from various levels would be analysed to study the above mentioned objectives. The data will be analysed in order to get an overall picture of the nature and trend of resource allocation vis-a-vis utilisation at state and district levels. For studying the qualitative issues regarding under-utilisation of resources like its causes, systems and processes, institutional practices, and organisation structure leading to it, documents like Financial and Management Report, Audit Reports, Utilisation Certificates, sanction letters, bank statements would be consulted. Key informant interview, based on semi-structured questionnaire of some of the key functionaries would help us understand the processes more clearly. Main findings (Min.150 Max. 200 words) Public investment in health is among the lowest in India, when measured in terms of share in Gross Domestic Product. As the results of the study show, since the introduction of NRHM, there has been some growth in the funds disbursed to the states. But, the increase in spending at the state, district and block levels was not adequate, leaving huge unspent balances. The quarterly break-up of fund flow shows that a bulk of the funds reaches the districts only during the latter part of the financial year, hampering the ability to spend. A major bottleneck is the issue of capacity building of staff to deal with the boost in level of spending and comprehending the advance guidelines of NRHM. Utilisation had also been more in activities in the form of entitlements like JSY and Family Planning or activities run on Mission mode like Pulse Polio Immunisation. Activities that require innovation had largely remained under-utilised. However, in the study state fund utilisation has increased and quality of spending has improved, fund flow processes have become more efficient, funds for system strengthening are being utilised and hence fund absorptive capacity has increased over the last few years. Discussion including recommendations (Max. 200 words) – The lack of absorptive capacity of the state was an outcome of chronic lack of investment on fundamental issues of infrastructure, availability of drugs, skilled human resource, planning, data management etc. Improving absorptive capacity is a long-term process and would require sustained efforts towards strengthening management and institutional capacities, filling up of vacant posts, higher salaries, much greater expenditure on drugs and other consumables etc. States that have some system in place have made better use of the current mechanism while others have failed. Ironically, NRHM, which was meant for strengthening health systems in states with greater developmental deficits, has ended up enhancing those very deficits. The task of health systems strengthening has gained some momentum over the last two-three years. A rearrangement of the financial mechanism with greater share of states and redoubled emphasis on decentralisation may be pointers for a future roadmap on the government’s health interventions in the country. NRHM is at best a small step forward in the endeavour to guarantee universal access to health. A gradual increase in health spending with long term perspective would be crucial to supplement the measures initiated through this umbrella health intervention.

The Financial and Non-Financial Performance Indicators of Paddy Farmers’ Organizations in Kedah

Over the years, the agriculture sector has steadily become an important contributor to Malaysia's Gross Domestic Product (GDP), employment, export revenue, export excise and duties, as well as the economic and rural development. In terms of percentage share of real GDP by sector, the three largest sectors in 2011 were services at 58.6 per cent, manufacturing at 27.5 per cent and agriculture at 7.3 per cent, while the remaining sectors were mining at 6.3 per cent and construction at 3.2 per cent (Borneo Post, 2012). Hence, the agriculture sector which is the third major component of the GDP is seen by government as an important sector which need to be given special attention especially with regard to the needs and performance of the farmers’ organizations which are distributed all over Malaysia. Recognizing the fact that the contribution of the Malaysian farmers’ organization can be further enhanced if the performance of these organizations can be further improved. Thus, the purpose of this research is to investigate the performance measurement indicators that can be used by Farmers Organization in order to measure its performance. This study is aimed at identifying the financial and non-financial performance indicator of farmers; organization. The study was conducted on the rice farmers’ organizations in the Muda Agricultural Development Authority (MADA) which is located in the northern state of Kedah. The rice farming region of MADA is regarded as the rice bowl of Malaysia because it is the most important and largest rice producing region of Malaysia. This research employed the qualitative convergent interview approach on the Farmers Organization in MADA. In this study, 9 performance indicators of the MADA Farmers’ Organization were identified.

Comment on “Meeting the Social Policy Challenges Facing Korea”

Comment on “Meeting the Social Policy Challenges Facing Korea”

Has the US Finance Industry Become Less Efficient? On the Theory and Measurement of Financial Intermediation

A quantitative investigation of financial intermediation in the United States over the past 130 years yields the following results: (i) the finance industry's share of gross domestic product (GDP) is high in the 1920s, low in the 1960s, and high again after 1980; (ii) most of these variations can be explained by corresponding changes in the quantity of intermediated assets (equity, household and corporate debt, liquidity); (iii) intermediation has constant returns to scale and an annual cost of 1.5–2 percent of intermediated assets; (iv) secular changes in the characteristics of firms and households are quantitatively important. (JEL D24, E44, G21, G32, N22)

The Informal Economy Worldwide: Trends and Characteristics

It has now been more than 40 years since the first attempts of defining and data collection on informal sector and informal employment on a large scale were launched in the early 1970s. Many debates paved the way for the international definition of the informal sector in 1993 and informal employment in 2003. The informal economy is finally a means for conciliating the two concepts and since the mid-1970s, national estimates of size (employment) and contribution (share of gross domestic product [GDP]) of the informal sector, and later on of the informal economy (and of its two major components: informal sector and employment outside the informal sector), have regularly been attempted and gathered on a large scale. This article is the most recent synthesis of these works. It is based on the recent compilations by the Bureau of Statistics of the International Labour Organization (ILO) and the National Accounts Section of the United Nations (UN) Statistics Division as well as on original national data. Employment in the informal economy is revealed to be as high as 58–70 per cent of non-agricultural employment at regional level (the informal sector representing from 50 per cent to 80 per cent of the informal economy) and the informal sectors contribution to non-agricultural GDP is from 25 per cent up to 50 per cent. JEL Classifications: O17, O57, J21

The Truth about Social Security and Medicare

In their book Aging Nation, Schulz and Binstock (2006) identified “merchants of doom,” by whom they meant a variety of academics, political figures, and journalists who argued that the United States cannot afford “the aging of our population” (p. 12). Although these individuals are not always consistent and, at times, disagree among themselves, their underlying message is that we face a “fiscal cancer” that “could have catastrophic consequences for our country” (CBS News, 2007; see also Aaron, 2009; Eisner, 1995; Schulz & Binstock, 2006). This message is usually accompanied by recommendations that we shift the cost of social security and Medicare to beneficiaries (Kingson & Altman, 2011). In the wake of the Great Recession and in light of the growing budget deficit, this perspective has become increasingly influential (Samuelson, 2011). Although many merchants of doom are “serious, well-respected individuals,” their views are often “built on exaggerations and faulty assumptions” (Schulz & Binstock, 2006, p. 13). For example, as Gorin (2007) wrote in a previous editorial, Underlying much of the concern about population aging are projected changes in dependency ratios (Gee, 2002). One of the best known of these is the beneficiary-to-covered-worker ratio, which shows the number of social security beneficiaries supported by each 100 workers (individuals ages 20 to 64) (Reno & Lavery, 2006). This ratio is expected to rise from 29 in 2000 to 46 in 2030. Although these figures have generated much alarm, they are somewhat misleading. Specifically, they overlook that older adults are not the only dependent age group. A more sophisticated measure is the total age-dependency ratio, which includes not only older adults, but also individuals under the age of 20 (Reno & Lavery, 2006). This gives us a much different perspective. It shows that we have already experienced the worst of the demographic shifts. In 1960 each 100 working-age people supported 90 dependents (people age 65 and older plus those under age 20); in 2030, they will support only 79. The point, of course, is that although the aging population will increase, there will be many fewer young people than when the boomers were growing up (Schulz & Binstock, 2006). Now, some might argue that we cannot really compare young people with older adults. After all, older adults are supported by government programs funded with tax dollars, whereas children generally receive support from their parents. This is true, but it misses the point. The fundamental issue is our society's ability to support its dependents (Schulz & Binstock, 2006). Parents do support their children, but as taxpayers, they also finance programs that support older adults. Moreover, children are recipients of tax dollars. Public education, which primarily benefits young people, is financed by state and local governments (Reno & Lavery). This is not a negligible expense. Proportionally, the increased spending on public schools to educate the boomers was much greater than the amount that will be needed to support them in retirement. Between 1950 and 1975, the share of gross domestic product (GDP) going to public education increased by 2.8 percent; in contrast, between 2005 and 2030, the share devoted to social security spending will increase by only 1.8 percent (Reno & Lavery). Furthermore, although “the boomers came into the world with nothing” (Leone, 2005), they will leave behind tremendous financial and other resources. The total dependency ratio suggests that the future is not as bleak as the merchants of doom have argued (Schulz & Binstock, 2006). Yet, this ratio is also limited. Like the beneficiary-to-covered-worker ratio, the total age-dependency ratio is too abstract, that is, it considers older adults and young people as categories, not in terms of their actual lives. In reality, some older adults and young people are employed, and some working-age people are not (Reno & Lavery, 2006). A more useful measure is the consumer-to-worker support ratio, which considers the total number of consumers, including working people, in relation to the “number of workers of all ages” (Reno & Lavery, 2006, p. 5). By this measure, in 1960 there were 268 consumers to every 100 workers; in 2030 there will be 214 consumers to every 100 workers. Although the composition of the dependent population will change, the total support burden will be much lower when the boomers retire than it was in their youth. (pp. 165–166)

Good News and Not-So-Good News

Reading or listening to daily news reports these days is not for the faint of heart. Calamitous events include, but by no means are limited to, the violent political upheavals and threat of nuclear weaponry in the Middle East; the sovereign debt crisis facing member nations of the European Union; expectations that gasoline prices will soon approach $5.00 a gallon; the unprecedented violent weather in the South and Great Plains states; and the contentious political sideshow of this presidential primary season. depressing news is ample reason to escape to a good book or to an alternative reality such as that captured by The Simpsons. Even the most optimistic news stories are cast with a thin veneer that belies a harsher reality. Since my last column, two such newsworthy items have caught my attention. At first glance, these reports appear to presage good news, but when examined more closely they reveal some underlying and deep-seated problems. Both items, either directly or indirectly, underscore the need for health reform. first item is the much reported slowdown in health care spending in 2010; the other recalls the optimistic employment picture drawn from February's labor market statistics. Slowdown in Health Care Spending As was widely reported in the media, the annual report on national health spending released by the Centers for Medicare and Medicaid Services (CMS) (Martin et al. 2012) disclosed that in 2010, health spending increased by only 3.9%. This statistic, and that for 2009, marked a watershed moment, representing the lowest spending increases reported by the federal government in the 51 years that such data have been collected. In addition, the report noted that overall spending as a share of gross domestic product (GDP) remained constant at 17.9%, and that Medicare spending in 2010 had increased by only 5%, the smallest increase in over a decade. However, upon taking a closer look at this apparent good news, it became clear that these changes were neither the result of enlightened public policies nor a byproduct of nascent health reform provisions. CMS report revealed that the reduction in spending growth was largely an aftershock of the Great Recession, attributable to high unemployment, the substantial loss in private health insurance, employer reluctance to hire and invest, and the lowest median real household income in more than 10 years. These changes, in turn, led to declines in individual demand for physician office visits, inpatient admissions, and emergency room use, as well as a reduction in the intensity of services. decline in utilization also helped slow the growth in prescription drug spending, which often accompanies physician and hospital events. One could certainly be tempted to put an optimistic spin on such reduced spending growth--that income-constrained consumers in consultation with their providers were seeking only essential services whose benefits were commensurate with their out-of-pocket costs. However, the more likely reality is that the loss of income and employer-sponsored health insurance for many individuals resulted in reduced access to essential health care services and the postponement of needed care. If this was the case, then the relatively small increases in health spending over the last two years had little to do with enlightened consumer and provider behavior or with a change in the persistent underlying factors that have driven health care spending. As a consequence, the decline in spending growth should not be interpreted as a meaningful reversal in longstanding trends. Underlying Factors When the underlying causes of high U.S. health care spending and its growth are considered, comparisons with other developed countries are typically invoked. In commenting on this issue, Reinhardt (2011) has nicely elucidated some key factors contributing to spending disparities between the U.S. …

Trends in Scale and Structure of Korea's Health Expenditure over Last Three Decades (1980-2009): Financing, Functions and Providers

This paper introduces statistics related to the size and composition of Korea's total health expenditure. The figures produced were tailored to the OECD's system of health accounts. Korea's total health expenditure in 2009 was estimated at 73.7 trillion won (US$ 57.7 billion). The annual per capita health expenditure was equivalent to US$ PPP 1,879. Korea's total health expenditure as a share of gross domestic product was 6.9% in 2009, far below the OECD average of 9.5%. Korea's public financing share of total health expenditure increased rapidly from less than 50% before 2000 to 58.2% in 2009. However, despite this growth, Korea's share remained the fourth lowest among OECD countries that had an average public share of 71.5%. Inpatient, outpatient, and pharmaceutical care accounted for 32.1%, 33.0%, and 23.7% of current health expenditure in 2009, respectively. A total of 41.1% of current health expenditure went to hospitals, 28.1% to providers of ambulatory healthcare (15.9% on doctor's clinics), and 17.9% to pharmacies. More investment in the translation of national health account data into policy-relevant information is suggested for future progress.

Impact of demographic ageing on sustainability of public finance in Serbia

Population ageing is a global phenomenon without precedent in the history of humanity having implications in all facets of life. From an economic point of view, population ageing is certainly one of the biggest challenges of modern time. A consequence of these global demographic tendencies reflected in growing number of pensioners which negatively affects sustainability of public pension systems financed by the principle of intergenerational solidarity (Pay-As-You-Go) - widely represented in public pension schemes of European countries. In this paper, impact of demographic ageing on pension systems is analyzed in the context of sustainability of public finance in Serbia in the period 2010-2050. Although the comparative analysis of the pension expenditure share in gross domestic product (GDP) does not point to significant differences between Serbia and the countries in the neighborhood and the European Union, the growth trend of subsidizing the Pension Fund from the government budget endangers medium-term sustainability of the public pension system in Serbia, bearing in mind that the implementation of measures proposed in pension reforms can be valorized only in the long run. The main objective of the analysis is projecting long-term pension expenditure as a share of GDP. The projections were formed indirectly by modeling the average pension expenditure, because this variable incorporates both growth in the total pension expenditure and growth in the number of pensioners as a result of demographic trends, and better reflects the actual growth of pension expenditure. For the purposes of the analysis, in addition to the projection of real GDP growth, size of the inactive population aged 65 and over, as the main contingent of the pension system users and the total number of pensioners, was projected by means of stochastic cohort component methodology. Based on these projections and assumptions about the growth rate of average pension expenditure (three scenarios), the projections of total pension expenditure (as a percentage of GDP) are produced for the period 2010-2050. The results indicate that the growth rate of pension expenditure over the past few years is unsustainable in the long run. However, there is fiscal space for continuous real growth of pensions that does not jeopardize the budget deficit on the medium term, and leads to long-term reduction of the share of pension expenditures in GDP. The proposed change would not affect sustainability of the pension system and consequently public finance in Serbia, even in completely certain circumstances of significant increase in the number of elderly and their pressure on the workforce. In this context, critical review of the current government approach to the pension growth dynamics was given from the perspective of medium-term sustainability of pension system, which resulted in appropriate recommendations. Generally, the intent of the Government of the Republic of Serbia on the indexation of pensions represent a good solution long term, but the premise of increasing pensions for a part of real GDP growth, if it is higher than 4%, is subject to criticism from the point of view of medium-term sustainability. The crisis cycle of the Serbian economy, similarly to that on a global level, has its maximum and minimum phase. After a maximum of the crisis is reached, there should be a few years of economic stagnation followed by gradual, and then by faster economic growth. Due to the projection of a relatively higher rate of economic growth and GDP in a future economic recovery, there is an increased risk that such a growth could be followed by sudden jumps in the growth of pensions, which could result in unsustainable funding of pension system. Therefore, the Government should impose some limitations in terms of the maximum increase in pension per annum in case of intensive and high economic growth.

A Study of Service Quality Management on Health Care Industry in Bangalore

I. International and National Scenario USA:: Health care spending in America accounts for a larger share of GDP than in any other country Health spending in the U.S., at about 17.5% of Gross Domestic Product (GDP) in 2010, is projected to grow to about 20% by 2020. Despite the incredible investment America continues to make in health care, 16.7% of people in the U.S. (50.7 million people, up from 46.3 million the previous year) lacked health care coverage for the entire year of 2009. For some, insurance was unavailable or unaffordable. In other cases, a lack of insurance was due to a personal decision not to pay for it.