IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-17-00542.html
   My bibliography  Save this article

The ambiguous effects of remittances on health expenditure: a panel data analysis

Author

Listed:
  • Nicolas Yol

    (GREThA - UMR CNRS 5113, Université de Bordeaux)

Abstract

This article analyzes how remittances impact public health expenditure in developing countries. By using various estimation techniques on panel data covering 46 developing countries, we show that remittances increase private health expenditure and reduce public health spending. Remittances create a crowding-out effect at the expense of the public sector because (1) they increase the use of private services instead of public healthcare, and (2) they decrease public incentives for investments in health. Our conclusions are ambiguous because on the one hand remittances represent a powerful way to finance private health expenditure, while on the other hand they reduce the healthcare provision from the public sector.

Suggested Citation

  • Nicolas Yol, 2017. "The ambiguous effects of remittances on health expenditure: a panel data analysis," Economics Bulletin, AccessEcon, vol. 37(4), pages 2561-2573.
    • Handle: RePEc:ebl:ecbull:eb-17-00542
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/Pubs/EB/2017/Volume37/EB-17-V37-I4-P230.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Chinn, Menzie D. & Ito, Hiro, 2006. "What matters for financial development? Capital controls, institutions, and interactions," Journal of Development Economics, Elsevier, vol. 81(1), pages 163-192, October.
    2. Ambrosius, Christian & Cuecuecha, Alfredo, 2013. "Are Remittances a Substitute for Credit? Carrying the Financial Burden of Health Shocks in National and Transnational Households," World Development, Elsevier, vol. 46(C), pages 143-152.
    3. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, February.
    4. Carlos Medina & Lina Cardona, 2010. "The Effects of Remittances on Household Consumption, Education Attendance and Living Standards: the Case of Colombia," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 72, pages 11-44.
    5. Salas, Vania B., 2014. "International Remittances and Human Capital Formation," World Development, Elsevier, vol. 59(C), pages 224-237.
    6. Dani Rodrik, 1998. "Why Do More Open Economies Have Bigger Governments?," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 997-1032, October.
    7. Cockx, Lara & Francken, Nathalie, 2014. "Extending the concept of the resource curse: Natural resources and public spending on health," Ecological Economics, Elsevier, vol. 108(C), pages 136-149.
    8. Christian Hubert Ebeke, 2012. "Do remittances lead to a public moral hazard in developing countries? An empirical investigation," Post-Print hal-00807100, HAL.
    9. Arze del Granado, Javier & Gupta, Sanjeev & Hajdenberg, Alejandro, 2013. "Is Social Spending Procyclical? Evidence for Developing Countries," World Development, Elsevier, vol. 42(C), pages 16-27.
    10. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    11. Frank, R. & Palma-Coca, O. & Rauda-Esquivel, J. & Olaiz-Fernández, G. & Díaz-Olavarrieta, C. & Acevedo-García, D., 2009. "The relationship between remittances and health care provision in Mexico," American Journal of Public Health, American Public Health Association, vol. 99(7), pages 1227-1231.
    12. Gilson, Lucy, 2003. "Trust and the development of health care as a social institution," Social Science & Medicine, Elsevier, vol. 56(7), pages 1453-1468, April.
    13. Maria Cristina Zhunio & Sharmila Vishwasrao & Eric P. Chiang, 2012. "The influence of remittances on education and health outcomes: a cross country study," Applied Economics, Taylor & Francis Journals, vol. 44(35), pages 4605-4616, December.
    14. Gruber, Jonathan & Simon, Kosali, 2008. "Crowd-out 10 years later: Have recent public insurance expansions crowded out private health insurance?," Journal of Health Economics, Elsevier, vol. 27(2), pages 201-217, March.
    15. Ahmed, Faisal Z., 2012. "The Perils of Unearned Foreign Income: Aid, Remittances, and Government Survival," American Political Science Review, Cambridge University Press, vol. 106(1), pages 146-165, February.
    16. Christian Hubert Ebeke, 2012. "Do Remittances Lead to a Public Moral Hazard in Developing Countries? An Empirical Investigation," Post-Print halshs-00728792, HAL.
    17. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Regan Deonanan & Benjamin Ramkissoon, 2024. "How Do Remittances Affect Child Mortality at Different Levels of Mortality? Estimating Unconditional Quantile Treatment Effects on Three Leading Causes of Child Mortality," SAGE Open, , vol. 14(2), pages 21582440241, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carine MEYIMDJUI, 2017. "Food Price Shocks and Government Expenditure Composition: Evidence from African Countries," Working Papers 201703, CERDI.
    2. Carine Meyimdjui, 2017. "Food Price Shocks and Government Expenditure Composition: Evidence from African Countries," CERDI Working papers halshs-01457366, HAL.
    3. Eric Rougier & Nicolas Yol, 2018. "The volatility effect of diaspora’s location: A migration portfolio approach," Cahiers du GREThA (2007-2019) 2018-09, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    4. Potrafke, Niklas, 2013. "Globalization and labor market institutions: International empirical evidence," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 829-842.
    5. Christian Hubert Ebeke, 2011. "Remittances, Countercyclicality, Openness and Government Size," Recherches économiques de Louvain, De Boeck Université, vol. 77(4), pages 89-114.
    6. Carine Meyimdjui, 2017. "Food Price Shocks and Government Expenditure Composition: Evidence from African Countries," Working Papers halshs-01457366, HAL.
    7. Nasr G. Elbahnasawy & Michael A. Ellis, 2016. "Economic Structure And Seigniorage: A Dynamic Panel Data Analysis," Economic Inquiry, Western Economic Association International, vol. 54(2), pages 940-965, April.
    8. Ablam Estel APETI & Bao-We-Wal BAMBE & Jean Louis COMBES, 2022. "On the Macroeconomic Effects of Fiscal Reforms : Fiscal Rules and Public Expenditure Efficiency," LEO Working Papers / DR LEO 2985, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    9. Aizenman, Joshua & Chinn, Menzie D. & Ito, Hiro, 2011. "Surfing the waves of globalization: Asia and financial globalization in the context of the trilemma," Journal of the Japanese and International Economies, Elsevier, vol. 25(3), pages 290-320, September.
    10. Elbahnasawy, Nasr G. & Ellis, Michael A., 2022. "Inflation and the Structure of Economic and Political Systems," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 59-74.
    11. Mateo Zokalj, 2016. "The impact of population aging on public finance in the European Union," Financial Theory and Practice, Institute of Public Finance, vol. 40(4), pages 383-412.
    12. Njangang, Henri & Asongu, Simplice A. & Tadadjeu, Sosson & Nounamo, Yann & Kamguia, Brice, 2022. "Governance in mitigating the effect of oil wealth on wealth inequality: A cross-country analysis of policy thresholds," Resources Policy, Elsevier, vol. 76(C).
    13. Tadadjeu, Sosson & Njangang, Henri & Asongu, Simplice A. & Kamguia, Brice, 2023. "Natural resources, child mortality and governance quality in African countries," Resources Policy, Elsevier, vol. 83(C).
    14. Williams, Kevin, 2024. "Remittances and government expenditures on human capital in developing countries," International Economics, Elsevier, vol. 178(C).
    15. Nasreen, Samia & Mahalik, Mantu Kumar & Shahbaz, Muhammad & Abbas, Qaisar, 2020. "How do financial globalization, institutions and economic growth impact financial sector development in European countries?," Research in International Business and Finance, Elsevier, vol. 54(C).
    16. Okada, Keisuke, 2013. "The interaction effects of financial openness and institutions on international capital flows," Journal of Macroeconomics, Elsevier, vol. 35(C), pages 131-143.
    17. Kunieda, Takuma & Okada, Keisuke & Shibata, Akihisa, 2011. "Corruption, Globalization, and Economic Growth: Theory and Evidence," MPRA Paper 35355, University Library of Munich, Germany.
    18. KOUAKOU, Dorgyles C.M. & YEO, Kolotioloma I.H., 2023. "Can innovation reduce the size of the informal economy? Econometric evidence from 138 countries," MPRA Paper 119264, University Library of Munich, Germany.
    19. Apeti, Ablam Estel & Combes, Jean-Louis & Minea, Alexandru, 2024. "Inflation targeting and fiscal policy volatility: Evidence from developing countries," Journal of International Money and Finance, Elsevier, vol. 141(C).
    20. Hayot Berk Saydaliev & Lee Chin, 2023. "The necessity of social infrastructure for enhancing educational attainment: evidence from high remittance recipient LMICs," Economic Change and Restructuring, Springer, vol. 56(3), pages 1823-1847, June.

    More about this item

    Keywords

    remittances; health expenditure; panel data; development economics;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • I1 - Health, Education, and Welfare - - Health

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-17-00542. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.