Welfare State and Life Satisfaction: Evidence from Public Health Care

Tinbergen Institute Discussion Paper No. 07-053/3

23 Pages Posted: 17 Jul 2007

See all articles by Jani-Petri Laamanen

Jani-Petri Laamanen

Tampere University - Department of Economics

Kaisa Kotakorpi

University of Turku - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Multiple version iconThere are 2 versions of this paper

Date Written: July 2007

Abstract

We examine the effect of publicly provided health care on welfare by combining local level data on public health care, and individual level data on life satisfaction. It is shown that relatively high expenditures in health care have a positive effect on individuals' life satisfaction in our data. We further illustrate how life satisfaction data can be used to directly test theoretical hypotheses about how the welfare effect of public provision should vary among different groups in the population. We find some evidence for an ends-against-the-middle equilibrium (Epple and Romano, 1996) in the provision of public health care, where middle-income individuals prefer higher public expenditure at the margin than low-income or high-income individuals. Further, our results indicate that valuation for health care depends on individual political orientation.

Keywords: Life satisfaction, public provision, health care

JEL Classification: H44, I18

Suggested Citation

Laamanen, Jani-Petri and Kotakorpi, Kaisa, Welfare State and Life Satisfaction: Evidence from Public Health Care (July 2007). Tinbergen Institute Discussion Paper No. 07-053/3, Available at SSRN: https://ssrn.com/abstract=1001163 or http://dx.doi.org/10.2139/ssrn.1001163

Jani-Petri Laamanen (Contact Author)

Tampere University - Department of Economics ( email )

P.O. Box 607
Tampere, FIN-33101
Finland

Kaisa Kotakorpi

University of Turku - Department of Economics ( email )

Turku
Finland

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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