Does public spending level mortality inequalities? Findings from - - PowerPoint PPT Presentation

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Does public spending level mortality inequalities? Findings from - - PowerPoint PPT Presentation

Oct 23, 2023 35 likes •336 views

Does public spending level mortality inequalities? Findings from East Germany after unification Fanny Kluge and Tobias Vogt Max Planck Institute for Demographic Research, Rostock, Germany and University of Rostock, Germany NTA Global

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Does public spending level mortality inequalities? – Findings from East Germany after unification

Fanny Kluge and Tobias Vogt

Max Planck Institute for Demographic Research, Rostock, Germany and University of Rostock, Germany

NTA Global Meeting 03.06.2013

Kluge and Vogt Public spending and mortality 1 / 19

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Background

Motivation

◮ In the literature: social inequalities are a major cause for

mortality differentials.

◮ The larger socioeconomic inequality the wider life

expectancy differentials.

◮ Mortality differentials should narrow if social inequalities

diminish among or within countries.

Kluge and Vogt Public spending and mortality 2 / 19

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Background

Motivation

◮ In the literature: social inequalities are a major cause for

mortality differentials.

◮ The larger socioeconomic inequality the wider life

expectancy differentials.

◮ Mortality differentials should narrow if social inequalities

diminish among or within countries.

◮ Can public policy contribute to a leveling of mortality

differentials?

Kluge and Vogt Public spending and mortality 2 / 19

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Background

The German reunification - a natural experiment

◮ Fall of Berlin Wall →

Kluge and Vogt Public spending and mortality 3 / 19

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Background

The German reunification - a natural experiment

◮ Fall of Berlin Wall → Reunification after 40 years of

separation and antagonistic political, social and economic ’treatments’ for a population sharing the same cultural and historic background.

Kluge and Vogt Public spending and mortality 3 / 19

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Background

The German reunification - a natural experiment

◮ Fall of Berlin Wall → Reunification after 40 years of

separation and antagonistic political, social and economic ’treatments’ for a population sharing the same cultural and historic background.

◮ What did the reunification mean for the East?

Kluge and Vogt Public spending and mortality 3 / 19

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Background

The German reunification - a natural experiment

◮ Fall of Berlin Wall → Reunification after 40 years of

separation and antagonistic political, social and economic ’treatments’ for a population sharing the same cultural and historic background.

◮ What did the reunification mean for the East?

◮ Introduction of the West German social security system

including access to modern health care.

Kluge and Vogt Public spending and mortality 3 / 19

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Background

The German reunification - a natural experiment

◮ Fall of Berlin Wall → Reunification after 40 years of

separation and antagonistic political, social and economic ’treatments’ for a population sharing the same cultural and historic background.

◮ What did the reunification mean for the East?

◮ Introduction of the West German social security system

including access to modern health care.

◮ Increase in relative and nominal income due to introduction

  • f West German Mark at a highly beneficial exchange rate
  • f 1:1.

Kluge and Vogt Public spending and mortality 3 / 19

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Background

Life expectancy and unification

West Germany East Germany

1956 1969 1982 1995 2008 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84

Females

unification 1956 1969 1982 1995 2008 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79

Males

unification

Years Life Expectancy at Birth Kluge and Vogt Public spending and mortality 4 / 19

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Background

Mortality improvements by age group

Kluge and Vogt Public spending and mortality 5 / 19

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Background

Research Question

Which impact did public spending have on the mortality convergence and how elastic is mortality to public spending?

◮ variety of factors changed after unification (pollution, life

style factors etc.)

◮ but limitation on public expenditures for pensions and

health care (Diehl 2004)

Kluge and Vogt Public spending and mortality 6 / 19

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Data and Methods

Data and Methodology

Data

◮ National Transfer Accounts for East and West Germany. ◮ Causes of Death Statistics Germany.

Kluge and Vogt Public spending and mortality 7 / 19

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Data and Methods

Data and Methodology

Data

◮ National Transfer Accounts for East and West Germany. ◮ Causes of Death Statistics Germany.

Modeling the impact of public spending on mortality

◮ Difference-in-difference estimation to estimate the elasticity

  • f mortality to public spending

◮ Generalized linear model with Poisson-distributed mortality

hazard to quantify the impact of different categories of public spending

Kluge and Vogt Public spending and mortality 7 / 19

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Results

Life expectancy and public pensions

1975 1985 1995 2005

Average Monthly Pension East vs West

Calendar Years per capita in Euro

200 400 600 800 1000

Average West Average East Kluge and Vogt Public spending and mortality 8 / 19

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Results

Life expectancy and health expenditures

1980 1985 1990 1995 2000

Life Expectancy vs. Health Expenditures

Calendar Years per capita in Euro

500 1000 1500 2000 2500 3000 3500 Unification Health Expenditures East Health Expenditures West Life Expectancy East Life Expectancy West 70 72 74 76 78 Life Expectancy at birth

Kluge and Vogt Public spending and mortality 9 / 19

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Results

East/West expenditure ratios

Both Sexes 1:1 Both Sexes 5:1 Females Males 1980 1984 1988 1992 1996 2000 5 10 15

Average Pensions

1980 1984 1988 1992 1996 2000 2 4 6 8 10

Health Expenditures Per Capita

Calendar Years West/East Ratios Kluge and Vogt Public spending and mortality 10 / 19

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Results

A simple diff-in-diff approach

Without Unification Unification

1980 1986 1992 1998 70 71 72 73 74 75 76 77 78 79 80

Life Expectancy

Years at Birth unification 1980 1986 1992 1998 1000 1900 2800 3700 4600 5500 6400

Total Social Expenditures

per capita in Euros unification

Kluge and Vogt Public spending and mortality 11 / 19

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Results

A simple diff-in-diff approach

Without Unification Unification

1980 1986 1992 1998 70 71 72 73 74 75 76 77 78 79 80

Life Expectancy

Years at Birth unification 1980 1986 1992 1998 1000 1900 2800 3700 4600 5500 6400

Total Social Expenditures

per capita in Euros unification

Red: real observed values

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Results

A simple diff-in-diff approach

Without Unification Unification

1980 1986 1992 1998 70 71 72 73 74 75 76 77 78 79 80

Life Expectancy

Years at Birth unification 1980 1986 1992 1998 1000 1900 2800 3700 4600 5500 6400

Total Social Expenditures

per capita in Euros unification

Red: real observed values Lee-Carter-Forecast Kluge and Vogt Public spending and mortality 12 / 19

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Results

A simple diff-in-diff approach

◮ ∆ life expectancy: 1.8 years ◮ ∆ public spending: 4,500 e

1 e invested in pensions or health care yields 3 hours life expectancy per year.

Kluge and Vogt Public spending and mortality 13 / 19

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Results

A simple diff-in-diff approach

◮ ∆ life expectancy: 1.8 years ◮ ∆ public spending: 4,500 e

1 e invested in pensions or health care yields 3 hours life expectancy per year. Other factors changed: pollution, nutrition, health behaviour, life style factors, etc. → GLM for different causes of death.

Kluge and Vogt Public spending and mortality 13 / 19

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Results

The regression model

log(mxj,t) = αj,t +βXj,t +εj,t Estimate

  • Std. Error

t value Pr(>|t|) (Intercept)

  • 9.960e+00

9.853e-02

  • 101.086

< 2e-16 *** Pensions

  • 2.698e-02

5.222e-06

  • 5.166

2.51e-07 *** Health

  • 3.728e-02

8.088e-06

  • 4.610

4.16e-06 *** Age 1.018e-01 1.263e-03 80.579 < 2e-16 *** Sex

  • 3.419e-01

2.555e-02

  • 13.379

< 2e-16 ***

Kluge and Vogt Public spending and mortality 14 / 19

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Results

All-cause mortality

All Cause Mortality Seite 1

All cause mortality

Ages above 60 Germany Ages above 60 East Germany Ages above 60 West Germany Estimate

  • Std. Error

P-value Estimate

  • Std. Error

P-value Estimate

  • Std. Error

P-value (Intercept)

  • 1,07E-001

4,23E-002 <2E-016

  • 1,05E-001

5,07E-002 <2E-016

  • 1,11E-001

8,22E-002 <2E-016 Pensions

  • 5,46E-006

1,17E-006 3,26E-006

  • 1,90E-005

1,76E-006 <2E-016 3,89E-006 1,77E-006 0,02844 Health

  • 3,50E-005

2,94E-006 <2E-016

  • 4,95E-005

4,80E-006 <2E-016

  • 1,81E-005

6,70E-006 0,00692 Age 1,09E-001 4,98E-004 <2E-016 1,08E-001 6,09E-004 <2E-016 1,11E-001 1,12E+000 <2E-016 Region

  • 1,06E-001

6,40E-003 <2E-016

  • Sex
  • 3,47E-001

5,85E-003 <2E-016

  • 3,10E-001

7,02E-003 <2E-016

  • 3,67E-001

1,06E-002 <2E-016 Unific

  • 1,08E-001

9,40E-003 <2E-016

  • 3,58E-003

1,94E-002 0,854

  • 1,47E-001

1,19E-002 <2E-016

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Results

All-cause mortality

All Cause Mortality Seite 1

All cause mortality

Ages above 60 Germany Ages above 60 East Germany Ages above 60 West Germany Estimate

  • Std. Error

P-value Estimate

  • Std. Error

P-value Estimate

  • Std. Error

P-value (Intercept)

  • 1,07E-001

4,23E-002 <2E-016

  • 1,05E-001

5,07E-002 <2E-016

  • 1,11E-001

8,22E-002 <2E-016 Pensions

  • 5,46E-006

1,17E-006 3,26E-006

  • 1,90E-005

1,76E-006 <2E-016 3,89E-006 1,77E-006 0,02844 Health

  • 3,50E-005

2,94E-006 <2E-016

  • 4,95E-005

4,80E-006 <2E-016

  • 1,81E-005

6,70E-006 0,00692 Age 1,09E-001 4,98E-004 <2E-016 1,08E-001 6,09E-004 <2E-016 1,11E-001 1,12E+000 <2E-016 Region

  • 1,06E-001

6,40E-003 <2E-016

  • Sex
  • 3,47E-001

5,85E-003 <2E-016

  • 3,10E-001

7,02E-003 <2E-016

  • 3,67E-001

1,06E-002 <2E-016 Unific

  • 1,08E-001

9,40E-003 <2E-016

  • 3,58E-003

1,94E-002 0,854

  • 1,47E-001

1,19E-002 <2E-016

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Results

All-cause mortality

All Cause Mortality Seite 1

All cause mortality

Ages above 60 Germany Ages above 60 East Germany Ages above 60 West Germany Estimate

  • Std. Error

P-value Estimate

  • Std. Error

P-value Estimate

  • Std. Error

P-value (Intercept)

  • 1,07E-001

4,23E-002 <2E-016

  • 1,05E-001

5,07E-002 <2E-016

  • 1,11E-001

8,22E-002 <2E-016 Pensions

  • 5,46E-006

1,17E-006 3,26E-006

  • 1,90E-005

1,76E-006 <2E-016 3,89E-006 1,77E-006 0,02844 Health

  • 3,50E-005

2,94E-006 <2E-016

  • 4,95E-005

4,80E-006 <2E-016

  • 1,81E-005

6,70E-006 0,00692 Age 1,09E-001 4,98E-004 <2E-016 1,08E-001 6,09E-004 <2E-016 1,11E-001 1,12E+000 <2E-016 Region

  • 1,06E-001

6,40E-003 <2E-016

  • Sex
  • 3,47E-001

5,85E-003 <2E-016

  • 3,10E-001

7,02E-003 <2E-016

  • 3,67E-001

1,06E-002 <2E-016 Unific

  • 1,08E-001

9,40E-003 <2E-016

  • 3,58E-003

1,94E-002 0,854

  • 1,47E-001

1,19E-002 <2E-016

Kluge and Vogt Public spending and mortality 15 / 19

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Results

Health care or pensions?

◮ Overall: health care has a greater impact than pensions in

reducing mortality but pensions are very important for the convergence of East and West Germany.

Kluge and Vogt Public spending and mortality 16 / 19

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Results

Health care or pensions?

◮ Overall: health care has a greater impact than pensions in

reducing mortality but pensions are very important for the convergence of East and West Germany.

◮ Different CoD: health care expenditures most beneficial in

reducing mortality from infectious diseases, followed by digestive and respiratory diseases. Pensions have greatest effect on mortality from external causes and circulatory diseases.

Kluge and Vogt Public spending and mortality 16 / 19

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Summary

Conclusion

◮ East Germans benefited greatly from increases in public

spending.

◮ Mortality differentials narrowed as level of disposable

income converged and access to modern health was granted.

◮ Indication that public spending can help to level mortality

differentials via the reduction of social inequalities.

Kluge and Vogt Public spending and mortality 17 / 19

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Next Steps

Future Research

◮ Include lag variables. ◮ Focus on older age groups. ◮ Use the German Pension Fund data to investigate if the

results hold on the individual level.

Kluge and Vogt Public spending and mortality 18 / 19

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◮ Thank you for your attention! ◮ Comments and Questions are welcome. ◮ E-Mail: vogt@demogr.mpg.de

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