Journal article

Population ageing and its implications on aggregate health care demand: empirical evidence from 22 OECD countries

Alfons Palangkaraya, Jongsay Yong

INTERNATIONAL JOURNAL OF HEALTH CARE FINANCE & ECONOMICS | SPRINGER | Published : 2009

Abstract

Recent evidence indicates that the relationship between age and health care expenditure is not as straightforward as it appears. In fact, micro-level studies find that time to death, rather than ageing, is possibly the main driver of the escalating health care costs in developed countries. Unfortunately, the evidence at the macro level is less clear and often depends on the specification of the empirical model used. We use an aggregate demand framework to assess whether health expenditure is more likely to be driven by ageing per se or proximity to death. Using panel data from 22 OECD countries from the first half of the 1990s, we find population ageing to be negatively correlated with healt..

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