The Empirical Study Of Population Age Structure’s Effect On Healthcare Expenditure

Since the economic reform and opening up,social,psychological and environmental problems come with high speed growth of China’s economy.These side effects have prominently threatened the physical and mental health of urban and rural residents.The growth of urban and rural residents’ healthcare expenditure has always been faster than their income growth,but the proportion in overall household expenditure has not yet reached the level of Western countries.Elderly people and children are considered as main consumers of healthcare services.Great changes in the age structure of the population affect the overall level of residents’ health care expenditures.Therefore,from the perspective of the population age structure,this article deeply explores its relationship with urban and rural residents’ healthcare expenditure and proposes policy recommendations based on the empirical results.First of all,this article reviews the existing literature on healthcare expenditure,providing both theoretical and empirical basis to the following research on factors impacting healthcare expenditure of urban-rural residents in China.Next,we look into the current situation of China urban and rural residents’ healthcare expenditure from the following aspects:the proportion of medical expenditure in the national economy,the difference between urban and rural residents’ healthcare expenditure,the time trend of population age structure,as well as the urban-rural and regional differences in the distribution of medical resources.Then,based on a total of 527 panel data from 31 Chinese provinces from 2003 to 2019,this paper uses dynamic panel GMM estimation method and Stata15.0 software for data analysis,in order to explore the impact of population age structure on residents’healthcare expenditure.Moreover,this article further constructs a moderating effect model to examine the moderating effect of the moderating variable urban-rural income ratio.Based on the existing literature,this article tries to make innovative attempts in the following aspects.One is to explore and solve the endogenous problem of population aging by introducing a lag period and other instrumental variables.Second is to examine the moderating effect of the urban-rural income ratio on the relationship between population age structure and residents’ health consumption expenditure.Third is to add observations on the declining birthrate of the population and fully reflect the two changing trends of the age structure in China.Fourth,two regional division methods are used in the analysis of heterogeneity,namely divided by East,Midwest and West and by high/lower than average level of urbanization,in order to compare the differences of the impact of population age structure in different economic regions on residents’ healthcare consumption.As the empirical results show,population aging has a positive and significant impact on the healthcare expenditure of urban and rural residents,while the declining proportion of children has a significant negative impact on the healthcare expenditure.Moreover,the impact of"more elderly" plays a bigger role than that of"fewer children".Although the loosening of the "two-child"policy can reverse the declining birthrate to a certain extent and alleviate the population structural problems,it will still not be able to slow down the impact of the aging on healthcare expenditures in the next ten years.In addition,the urban-rural income gap has a strong moderating effect on the relationship between population aging and healthcare consumption and restricts the role of aging on the promotion of healthcare consumption.Nevertheless,it cannot affect the relationship between the declining birthrate and healthcare consumption.In addition,the declining birthrate has a more significant impact on families in eastern regions and areas where the level of urbanization is higher than the national average,while the impact of population aging in various local areas is not obvious.Despite the implementation of "two-child" policy and the moderating effect of the urban-rural income gap,the impact of population aging on residents’ healthcare consumption comes out gradually and cannot be underestimated.To this end,national,social and individual levels should be prepared in advance for long-term responses.This article proposes four policy recommendations.First is to improve the urban-rural social security system to reduce the burden on residents’ health care.Second is to cultivate new healthcare consumption hot spots and promote consumption upgradation.Third is to improve the level of pediatric medical and health services.Fourth is to vigorously develop healthcare and pension industry for the elderly people.