The Impact Of Income On Health Expenditures Of The Older Population In China

Nowadays,China has become the country with the largest number of the older in the world and one of the countries with the fastest population aging.Although compared with many countries and regions in the world,such as Japan and Europe,China’s aging problem has not appeared for a long time,but in recent years it has become more and more intense.At the same time,due to the relevant policies implemented by China,the growth rate of the young population has been lower than the natural growth rate.Under the combined influence of these two factors,China’s aging problem has become more severe,it has attracted worldwide attention.From a long-term perspective,the older population will maintain a relatively high level both in terms of the overall number and the proportion of the population.The older are the most vulnerable and most in need of care among the entire population,so health and medical services are extremely important to them.It is worth noting that the older are under increasing pressure on health expenditure.In this paper,we mainly study the impact of income on the health expenditure of middle-aged and elderly people in China.The data used in this study are from the China Health and Retirement Longitudinal Survey(CHARLS),a longitudinal study of people over 45 years old in China,using data from Harmonized CHARLS 2011,2013 and 2015 to construct panel data.In this study,firstly,we explore the relationship between income and health expenditure by using pooled OLS and fixed effect model,finding that there has significant effect of income on health expenditure of respondents,and income elasticity of health expenditure is approximately 0.023,which implies that health care is still a necessity for respondents.In addition,because there are quite a few health expenditures that are zero,hence we consider using Tobit model for regression to analyze the influencing factors of respondent’s health expenditure.We explore both Tobit analysis of OLS model and random Tobit analysis,and present the marginal effects.The results reveal that the effect of household income on health expenditure is significant,as well as pension income and transfer income.Besides,we report the marginal effects on latent variable and the explained variable.For robustness checks,we use total household expenditure in the past year rather than income as independent variable.It has been shown that similar trends of the relationship between total household expenditure and health expenditure of respondent,thus an indication that our model works well.Next,in order to conduct the robustness check further,we process the heterogeneity analysis for health expenditure.Based on gender,educational level and hukou of respondents,we conduct heterogeneity analysis for health expenditure.It suggests that for female,every increase of income by 1% will improve health expenditure by approximately 0.034%.However,there is no significant effect of income on health expenditure for male.We also derive that the health expenditure of respondents with educational level below elementary school(contains elementary school)will improve significantly than others.Based on the above analysis,it is necessary for the government to ensure the quantity and quality of health services received by residents through corresponding policy support and financial support.For instance,it can consider increasing and improving the health facilities,and improving the quality of health services.In terms of income level,this paper finds that the respondent’s income level will have a significant positive impact on the health expenditure,and as income increases,respondents will increase their expenditure of health services.Therefore,the government should be committed to promoting the improvement of the income and living standards of the residents in both the rural and urban areas.Based on this,we propose the following policy implications.Firstly,improve the unified systems of basic medical insurance,serious disease insurance and basic old-age insurance for rural and non-working urban residents.Secondly,improve the medical and health service system,especially in rural areas.Establish and improve relevant policies and systems,make community-level medical workers more attractive,and strengthen the training of medical and health professionals in rural areas.In addition,establish a tiered medical treatment system across the board and implement differentiated medical insurance payment policies.Also,establish and improve a nationwide fitness service system in light of local conditions.Thirdly,focus on alleviating structural employment issue,accelerating the development of skilled personnel by focusing on improving the skill level and ability quality of workers and meeting the development needs of society,industry,enterprises and individuals.