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The Tax Effects of Health Expenditures on Aging Economies: Empirical Evidence on Selected OECD Countries

Author

Listed:
  • Pelin Varol İYIDOĞAN

    (Department of Public Finance, Hacettepe University, Ankara, Turkey)

  • Eda BALIKÇIOĞLU

    (Department of Public Finance, Kırıkkale University, Kırıkkale, Turkey)

  • H. Hakan YILMAZ

    (Department of Public Finance, Ankara University, Ankara, Turkey)

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.

Suggested Citation

  • Pelin Varol İYIDOĞAN & Eda BALIKÇIOĞLU & H. Hakan YILMAZ, 2017. "The Tax Effects of Health Expenditures on Aging Economies: Empirical Evidence on Selected OECD Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 116-127, March.
    • Handle: RePEc:rjr:romjef:v::y:2017:i:1:p:116-127
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    health expenditure; aging; tax; cointegration;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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