THE TAX EFFECTS OF HEALTH EXPENDITURES ON AGING ECONOMIES: EMPIRICAL EVIDENCE ON SELECTED OECD COUNTRIES


VAROL İYİDOĞAN P., BALIKÇIOĞLU E., Yilmaz H. H.

ROMANIAN JOURNAL OF ECONOMIC FORECASTING, vol.20, no.1, pp.116-127, 2017 (SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 20 Issue: 1
  • Publication Date: 2017
  • Journal Name: ROMANIAN JOURNAL OF ECONOMIC FORECASTING
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus
  • Page Numbers: pp.116-127
  • Hacettepe University Affiliated: Yes

Abstract

The aim of our study is twofold: i) we examine the effect of aging on public health expenditures; and ii) investigate the fiscal burden of the health expenditures over the period 1965-2012 for selected OECD countries. As empirical methodology, we perform nonlinear unit root test proposed by Kapetanios et al. (2003). Afterwards, we employ Seo (2006) cointegration test based on a threshold vector error correction model (TVECM). We find evidence supporting the impact of aging population on the public health expenditures, thus on the tax burden for all countries with the exception of Japan, Sweden and the US.