The (W)Health of Nations: The Impact of Health Expenditure on the Number of Chronic Diseases

Abstract

We investigate the impact of health expenditure on health outcomes on a large sample of Europeans aged above 50 using individual and regional-level data. We find a significant and negative effect of lagged health expenditure on later changes in the number of chronic diseases. This effect varies according to age, health behavior, gender, income and education, thereby supporting the hypothesis that the impact of health expenditure across different interest groups is heterogeneous. Our empirical findings are confirmed also when health expenditure is instrumented with parliament political composition.

Keywords: health satisfaction, education, life satisfaction, public health costs

JEL Classification: I12, I11, I18