The impacts of life insurance asymmetrically on health expenditure and economic growth: Dynamic panel threshold approach

Abstract

This study examines the impacts of life insurance asymmetrically on health expenditure and economic growth. Using the dynamic panel threshold model, we find that life insurance growth has a regime switch factor that may change the relationship between health expenditure growth and economic growth. Our results show that the asymmetrical information of life insurance growth affects the causal relationship between health expenditure growth and economic growth. In a low life insurance growth regime, the negative growth of life insurance can stimulate health expenditure and economic growth, which can have a positive feedback effect. However, in the interval of high life insurance growth, the growth does not affect health expenditure or economic growth; there is an adverse feedback effect between economic growth and health expenditure growth, whereby economic growth stimulates health expenditure growth, but health expenditure growth reduces economic growth.