Where Is Health Spending Taking Us?

Health spending in the U.S. is on the rise, and the government may deal with this in any number of ways that affect economic growth and welfare.

Elwin Tobing and Jau-Lian Jeng, both of Azusa Pacific University, published “Long-Run Growth and Welfare Effects of Rising US Public Health Expenditure” on May 9, 2012 in Public Finance Review. To see more OnlineFirst articles, click here.

The abstract:

The continuing increase of the US public health spending would inevitably lead to a reduction in productive government spending, higher taxes, or both. If the government enacts any of the policies, to what extent would the rising health care spending affect the long-run economic growth and welfare? Using an endogenous growth model where investment in education is the driving force of growth, our quantitative analysis shows that if health is a consumption good, such policies will reduce long-run growth and welfare. To finance public health spending at 20 percent of gross domestic product (GDP), a policy that simultaneously reduces productive government spending and raises tax rates could decrease the long-run growth by 0.7 percentage points and welfare by 14 percent. When health is both consumption and productive good, this policy reduces long-run growth and welfare modestly.

To learn more about Public Finance Review, please follow this link.

Are you interested in receiving email alerts whenever a new article or issue becomes available online? Then click here!

This entry was posted in Health Care and tagged , , , by Cynthia Nalevanko, Editor, Management INK. Bookmark the permalink.

About Cynthia Nalevanko, Editor, Management INK

Founded in 1965, SAGE is the world’s leading independent academic and professional publisher. Known for our commitment to quality and innovation, SAGE has helped inform and educate a global community of scholars, practitioners, researchers, and students across a broad range of subject areas. With over 900 employees globally from principal offices in Los Angeles, London, New Delhi, Singapore, and Washington DC, our publishing programme includes more than 560 journals and over 800 books, reference works and databases a year in business, humanities, social sciences, science, technology and medicine. Believing passionately that engaged scholarship lies at the heart of any healthy society and that education is intrinsically valuable, SAGE aims to be the world’s leading independent academic and professional publisher. This means playing a creative role in society by disseminating teaching and research on a global scale, the cornerstones of which are good, long-term relationships, a focus on our markets, and an ability to combine quality and innovation. Leading authors, editors and societies should feel that SAGE is their natural home: we believe in meeting the range of their needs, and in publishing the best of their work. We are a growing company, and our financial success comes from thinking creatively about our markets and actively responding to the needs of our customers.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s