Understanding Cross-Country Differences in Health Status and Expenditures

47 Pages Posted: 24 Mar 2020 Last revised: 9 Dec 2021

See all articles by Raquel Fonseca

Raquel Fonseca

University of Québec at Montréal

François Langot

University of Angers - Centre d'Etudes Prospectives d'Economie Mathematique Appliquees a la Planification (CEPREMAP); Université du Maine - Groupe d' Analyse des Itineraires et Niveaux Salariaux (GAINS); IZA Institute of Labor Economics

Pierre-Carl Michaud

HEC Montreal

Thepthida Sopraseuth

University of Cergy-Pontoise

Date Written: March 2020

Abstract

Using a general equilibrium heterogeneous agent model featuring health production, we quantify the relative contribution of price distortions in the health market, TFP and other health risks in explaining cross-country differences in health expenditure (as a share of GDP) and health status. Estimated parameters reveal a substantial price wedge that explains at most 20% of the difference in health spending (as a share of GDP) and 30% of the difference in health status between Europe and the U.S. We estimate a one percentage point negative impact on the life-time cost-of-living of Americans from higher prices due to inefficiencies.

Suggested Citation

Fonseca, Raquel and Langot, Francois and Michaud, Pierre-Carl and Sopraseuth, Thepthida, Understanding Cross-Country Differences in Health Status and Expenditures (March 2020). NBER Working Paper No. w26876, Available at SSRN: https://ssrn.com/abstract=3559165

Raquel Fonseca (Contact Author)

University of Québec at Montréal ( email )

Francois Langot

University of Angers - Centre d'Etudes Prospectives d'Economie Mathematique Appliquees a la Planification (CEPREMAP) ( email )

Ecole Normale Superieure
48 boulevard Jourdan
75014 Paris
France

Université du Maine - Groupe d' Analyse des Itineraires et Niveaux Salariaux (GAINS) ( email )

72085 Le Mans Cedex 9
France

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Pierre-Carl Michaud

HEC Montreal ( email )

3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H2X 2L3
Canada

Thepthida Sopraseuth

University of Cergy-Pontoise ( email )

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