The Effect of Urbanization on Health Care Expenditure: Evidence From China

Abstract

This paper investigates the impact and non-linear effects of urbanization on health care expenditure in China. The results indicate that urbanization in both Eastern and Central regions can significantly increase health care expenditure. But the impact of urbanization is not significant, which is related to the backward economic development level and low urbanization rate in the Western region. Taking population aging into consideration, the results of the panel threshold regression model imply that the positive relationship between urbanization and health care expenditure becomes greater when the level of population aging exceeds 10.72% in the Eastern region and 7.00% in the Western region. Therefore, in the urbanization process, the government should pay attention to the positive effect of urbanization on health care expenditure, provide more financial support for the construction of medical facilities, and expand the coverage of medical services and security for residents, especially for elderly people.