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The effects of ageing population on health expenditure and economic growth in China: A Bayesian-VAR approach

Lopreite, M., Zhu, Z. (2020) The effects of ageing population on health expenditure and economic growth in China: A Bayesian-VAR approach. Social Science and Medicine, 265 . Article Number 113513. ISSN 0277-9536. (doi:10.1016/j.socscimed.2020.113513) (KAR id:87410)

Abstract

The increasing proportion of the population aged 65 or over has generated a global rise of health spending due to higher demand for medical and long-term care services, which has become a growing challenge to the sustainability of public finances across countries. This phenomenon is especially prominent in China, which has experienced accelerated rates of both economic growth and population ageing over the past four decades. Using Bayesian-VAR (B-VAR) models we compute the impulse response functions (IRFs) and the forecast error variance decomposition functions (FEVDs) to empirically examine the dynamic relationships between ageing index, life expectancy, economic growth and health expenditure in China. We compare China with the USA which has distinct trajectories of population structure and economic development to better understand the former's dynamic patterns. We find a pronounced response for both the USA and China of ageing index to life expectancy and of health spending per capita to GDP per capita, while ageing population induces a relatively strong reaction from health expenditure per capita in China. Our results are robust with either nominal or real variables. These findings suggest that, in China, a well-rounded policy accommodating economic, social and health factors is needed to improve the quality of life of the ageing population for a sustainable development of the economy.

Item Type: Article
DOI/Identification number: 10.1016/j.socscimed.2020.113513
Uncontrolled keywords: aging population; Bayesian analysis; economic development; economic growth; elderly care; health expenditure; health services; policy analysis; policy approach; population structure; social policy, aging; Article; Bayesian VAR model; China; correlation coefficient; demography; economic development; forecasting; gross national product; growth rate; health care cost; health care need; health care policy; human; life expectancy; mathematical model; population health; quality of life; social aspect, China; United States
Subjects: H Social Sciences
H Social Sciences > H Social Sciences (General)
Divisions: Divisions > Kent Business School - Division > Department of Analytics, Operations and Systems
Depositing User: Zhen Zhu
Date Deposited: 08 Apr 2021 15:06 UTC
Last Modified: 04 Mar 2024 17:05 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/87410 (The current URI for this page, for reference purposes)

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