Social Health Insurance vs. Tax-Financed Health Systems—Evidence from the OECD

This paper exploits the transitions between tax-financed health care and social health insurance in the OECD countries over the period 1960-2006 to assess the effects of adopting social health insurance over tax finance on per capita health spendin...

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Bibliographic Details
Main Author: Wagstaff, Adam
Language:English
Published: 2012
Subjects:
WAR
Online Access:http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090121101737
http://hdl.handle.net/10986/4018
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Summary:This paper exploits the transitions between tax-financed health care and social health insurance in the OECD countries over the period 1960-2006 to assess the effects of adopting social health insurance over tax finance on per capita health spending, amenable mortality, and labor market outcomes. The paper uses regression-based generalizations of difference-in-differences and instrumental variables to address the possible endogeneity of a country's health system. It finds that adopting social health insurance in preference to tax financing increases per capita health spending by 3-4 percent, reduces the formal sector share of employment by 8-10 percent, and reduces total employment by as much as 6 percent. For the most part, social health insurance adoption has no significant impact on amenable mortality, but for one cause-breast cancer among women-social health insurance systems perform significantly worse, with 5-6 percent more potential years of life lost.