The Effects of the Ageing Population on Healthcare Expenditure: A Comparative Study of China and India

Abstract

The motivation of the study is to compare the impact of aging population on healthcare expenditure between China and India as demographic projection forecast that the percentage people above 65 years will be 26 percent by 2050. The used of long time series data of China and India from 1970 to 2011 helps us to identify the long run relationship between ageing population and healthcare expenditure using ARDL bound testing approach. The result of the bounds test showed that there is a stable, long-run relationship between the ageing population and healthcare expenditure, life expectancy, and GDPC. In fact, results revealed that the ageing population influences healthcare expenditure both in China and India. However, in the case of China the ageing population is a more dominant influence on healthcare expenditures because the total ageing in China is greater than that of the population in India.