Four Long-Term Scenarios for the Dutch Government and the Health Care Sector

Abstract

This study presents four long term scenarios for government and health care services in the Netherlands. In 2001, the expenditure on government and health care services (including pharmaceuticals) was about 24% of Dutch GDP. According to all scenarios this will increase to between 29% and 33% of Dutch GDP in 2040. Partly due to relatively low productivity growth, the share in national employment will increase from 22% to 28-31% in 2040. Health care expenditures will increase from 10.3% of GDP in 2001 to between 16.8% and 18.7% of GDP in 2040. In all scenarios ageing and advances in medical technology are major driving factors of the growth in health care expenditures. Health care expenditures in the two market scenarios are about 1% of GDP higher than in the two public scenario’s. Volume growth of health care is 2.4% per year, twice as high as in the public scenario with lowest growth. Expenditure on government services (public administration, defence and subsidised education) will increase in the public scenarios from 13.6% of GDP in 2001 to 15% or 16% in 2040. However, in the two more market-oriented scenarios the government sector will decrease in size to 11% of GDP in 2040. Due to higher growth rates of GDP per capita, the growth of government services per capita in the market-oriented scenarios is only marginally smaller than in the more public scenarios.

Keywords: Long-run scenarios, public administration, defence, education, health care, productivity, ageing

JEL Classification: H5, I5