The Social Health Cost Of China's Economic Growth

China's economy has entered a period of new normal after 30 years' rapid growth.The economy fundamental not only has huge quantitative change,but also qualitative leap.Viewing China's economy with old opinion and thinking from the past is neither accurate nor realistic.Currently,China's economic downward pressure has become increasingly prominent.Macro economic has lost balance,The developing power has weakened.Quite some short boards exist in economic and social development.Long-term resource consumption and environmental consumption-based economic growth mode has brought some deep-seated problems.Resource shortages,environmental pollution,etc have become a bottleneck restricting China's economic development.Meanwhile,residents'health loss is growing as well.It costs too much to pursue economic growth by sacrificing the environment even the residents' health.Behind the remarkable economic development,people have paid a huge health cost.Although the main health indicators of the residents in China are generally superior to the average level of middle and high income countries,maintaining the residents' health is facing new challenges and becoming a difficult task in social development with industrialization,urbanization,population aging,eco-environment and lifestyle changes.However,controversy does exist in academia about whether the healthy human capital is able to promote economy growth.Among the key factors of economic development,residents'health is rarely analyzed as a social cost.The study on the social health cost in economic growth has made us understand more about the existing problems related to people's livelihood during China's economic transition period.It has both important theoretical and practical value for improving regional development strategy,medical and health care system and ensuring the sharing of economic development.The goal of this paper is to estimate and analyze the social health costs in China's economic growth,including absolute health costs and relative health costs.This paper also aims to assess the effect on improving residents' health with current medical and health care systems,so as to provide guidance and recommendations on promoting the healthy development of economy and improving social security system.We first use grouped panel data SVAR model with interactive effect to measure the dynamic trends and marginal contribution of health capital inputs in different rural and urban region in China.The result shows that the marginal effect of health inputs of human capital in the urban area decreases from the east to the west in China.The health costs account for the proportion of real GDP of about 1.8%in the eastern region,while in the central or western part of China,the marginal contribution of health inputs is mostly negative.The equilibrium path of health GDP is about 0.9%higher than its real path.The marginal contribution of the health inputs in the rural area could be characterized using a inverted "U" shape in the geographic form.The health costs account for the proportion of real GDP of about 2%in the central part of China,The equilibrium path of health GDP in the western and eastern regions is about 1.3%higher than its real path.System shows its competition between rural and urban areas when considering its promotion effect to the human health of the society,especially before the year 2009.This indicates the relative lack of supply in the social health protection system,on the other hand,it indicates the new medical reform policy starting from 2009 has a dramatical effect.Then we developed panel data SVAR model with interactive effect in order to measure the split effect and dynamic trend on the inequalities of residents' health from different economic factors.It is showed that the widening of the income gap,capital gap and industry gap are all harmful to the equality of residents' health.Among them,the income gap has the largest split effect to the inequality of residents' health.Nonquantifiable social factors such as system and policies have no effect or even side effect on reducing the inequality of residents' health after the year 2011.This indicates that improving the system and policies which are related to residents' health is really urgent.Also,the policy implementation in the middle and west regions in China is not as comprehensive as that in the eastern region.After analyzing the convergence of China's regional health status,we found that unconditional convergence fails,the inequality situation of health caused by the initial difference of it won't get better over time.Conditional Beta convergence is satisfied,external factors as income,environmental quality,etc will make the path of the regional health situation tend to be convergent.The result from Theil index calculation shows that the inequality situation in the Eastern district expanded then reduced.In the middle and western district,the inequality stays mostly stable with little reduction.The inequality among different districts tends to expand these years.At last,we evaluated the effect caused by the policy of NCMS.Based on HCW disposition effect and the measured result of IEPSVAR system,this part shows:NCMS is able to obviously reduce the medical expenses of rural residents.The potential medical expenses in different districts is 16.2%to 350.9%higher than the practical expenses.The effect is more obvious especially in the seriously polluted or highly developed districts.The growth effect on rural residents' income could vary from 0.13%to 2.81%among different districts.So the NCMS not only truly reduced the burden on famers' medical treatment,but also promoted the economic development in rural areas.