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Social health insurance vs. tax-financed health systems - evidence from the OECD (English)

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.


  • Author

    Wagstaff, Adam

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  • Document Type

    Policy Research Working Paper

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  • Country

    East Asia and Pacific,

  • Region

    East Asia and Pacific,

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  • Doc Name

    Social health insurance vs. tax-financed health systems - evidence from the OECD

  • Keywords

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Wagstaff, Adam

Social health insurance vs. tax-financed health systems - evidence from the OECD (English). Policy Research working paper ; no. WPS 4821 Washington, D.C. : World Bank Group.