 WHY DO AMERICANS SPEND SO MUCH MORE ON HEALTH CARE THAN EUROPEANS?Hui He (), Kevin X.D. Huang and Lei Ning International Economic Review, 2021, vol. 62, issue 4, 1363-1399 Abstract: Empirical evidence shows that both leisure and medical care are important in maintaining health and taxation may affect the allocation of these two inputs. We highlight this point using an analytical setting whose implications conform to micro‐ and macro‐data. We then quantify these implications using a life‐cycle overlapping generations model where taxation and relative health‐care price are key determinants of the composition of the two inputs in the endogenous accumulation of health capital. We find that differences in taxation alone explain 44.7% of U.S.–EU differences in health expenditure–GDP ratio and more than 70% of their differences in time allocation. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:wly:iecrev:v:62:y:2021:i:4:p:1363-1399 Ordering information: This journal article can be ordered from Access Statistics for this article International Economic Review is currently edited by Michael O'Riordan and Dirk Krueger More articles in International Economic Review from Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297. Contact information at EDIRC. |
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