A country-level empirical study on the fiscal effect of elderly population health: The mediating role of healthcare resources

Abstract

Demographic shifts towards an aging population are becoming a significant fiscal challenge for governments. Previous research has explored the fiscal consequences of the expanding elderly population, but the impact on the elderly’s health quality is less mentioned. The balanced relationship between elderly population health and public finance is a major concern of the global political agenda on the aging society. This article used cross-country panel data from 2000 to 2019 to examine the fiscal effect of the elderly health burden and the mediating role of healthcare resources. The results are demonstrated: The elderly health burden has a negative impact on fiscal balance, especially in aged society and longevity countries. Moreover, the mediating effect of healthcare resources is significant, whereby various forms of healthcare resources such as funds, labor, and facilities all have significant effects. Thus, the conceptual framework of elderly population health, healthcare resources, and public finance is confirmed that the elderly health burden specifically leads to the growing consumption of healthcare resources, which reduces the fiscal balance. It is concluded that reducing the elderly health burden and improving healthcare resource efficiencies are two feasible strategies to enhance fiscal sustainability.