Cost Disease of Health Care and no Growth
Abstract
This study examines whether health care is affected by Baumol’s cost disease in a scenario of no growth. Baumol's model implies that stagnant sectors are driven by wage increases in excess of productivity growth. But in a no growth economy the income is constant. It is investigated in two institutional proposals, selective reduction of productivity and reduction of working hours. In both scenarios the cost disease does not affects the health care. However, in the second scenario an important result is found. In this sector, with slow productivity growth, will be necessary a greater number of workers. The relative cost of health care will increase over the years. Therefore, although the cost disease does not affect the health sector in a no growth economy, the relative cost of health should continue to rise.
Keywords:
health care costs, Baumol cost disease, no growthReferences
Alesina, A.; Glaeser, E.; Sacerdote, B. (2005). Work and Leisure in the US and Europe: Why so Different? NBER Chapters. NBER Macroeconomics Annual. National Bureau of Economic Research, Inc.
Google Scholar
Baltagi, H.; Moscone, F. (2010). Health care expenditure and income in the OECD reconsidered: Evidence from panel data. Economic Modelling 27: 804–811.
Google Scholar
Barrett, S.; Stavins, R. (2003). Increasing Participation and Compliance in International Climate Change Agreements. International Environmental Agreements: Politics, Law and Economics 3: 349–376.
Google Scholar
Bates, L.; Santerre, R. (2013). Does the U.S. health care sector suffer from Baumol’s cost disease? Evidence from the 50 states. Journal of Health Economics 32: 386– 391.
Google Scholar
Baumol, W. (1967). Macroeconomics of Unbalanced Growth: the Anatomy of Urban Crisis. The American Economic Review 57(3): 415-426.
Google Scholar
Baumol, W. (1993). Health care, education and the cost disease: A looming crisis for public choice. Public Choice, 77: 17-28.
Google Scholar
Baumol, W. (1996). Children of Performing Arts,The Economic Dilemma: The Climbing Costs of Health Care and Education. Journal of Cultural Economics 20: 183-206.
Google Scholar
Colombier, C. (2012). Drivers of health care expenditure: Does Baumol's cost disease loom large? FiFo Discussion Papers 12-5.
Google Scholar
De Mooij, R.; Parry, I.; Keen, M. (2012). Fiscal Policy to Mitigate Climate Change: A Guide for Policymakers. Washington D.C.: International Monetary Fund.
Google Scholar
Dreger, C.; Reimers, H. (2005). Health Care Expenditures in OECD Countries: A Panel Unit Root and Cointegration Analysis. IZA DP 1469.
Google Scholar
Ewing, B. et al. (2010). Ecological Footprint Atlas. Oakland, CA: Global Footprint Network.
Google Scholar
Fedeli, S. (2012). The impact of GDP on health care expenditure: the case of Italy (1982-2009). Working Paper 153.
Google Scholar
Gerdtham, U.; Lothgren, M. (2000). On stationarity and cointegration of international health expenditure and GDP. Journal of Health Economics 19: 461–475.
Google Scholar
Gsottbauer, E.; van den Bergh, J. (2013). Bounded rationality and social interaction in negotiating a climate agreement. Int Environ Agreements 13: 225–249.
Google Scholar
Hartwig, J. (2008a). What drives health care expenditure?—Baumol’s model of ‘unbalanced growth’ revisited. Journal of Health Economics 27: 603–623
Google Scholar
Hartwig J. (2008b). Has health capital formation cured ‘Baumol’s Disease’? – Panel Granger causality evidence for OECD countries. KOF Working Papers 206.
Google Scholar
Kallis, G. (2011). In defence of degrowth. Ecological Economics 70: 873–880.
Google Scholar
Kallis, G. (2013). Societal metabolism, working hours and degrowth: a comment on Sorman and Giampietro. Journal of Cleaner Production 38.
Google Scholar
Keenan, P. (2004). What’s Driving Health Care Costs? The Commonwealth Fund. Issue Brief.
Google Scholar
Knight, K.; Rosa, E.; Schor, Juliet J. (2012). Reducing Growth to Achieve Environmental Sustainability: The Role of Work Hours. Working paper Series 304.
Google Scholar
Kasser, T.; Sheldon, K. (2009). Time Affuence as a Path toward Personal Happines and Ethical Busines Practice: Empirical Evidence from Four Studies. Journal of Business Ethics 84: 243-55.
Google Scholar
Lago-Peñas, S.; Cantarero-Prieto, D.; Blázquez-Fernández, C. (2013). On the relationship between GDP and health care expenditure: A new look. Economic Modelling 32: 124–129.
Google Scholar
Medeiros, J.; Schwierz, C. (2013). Estimating the drivers and projecting long-term public health expenditure in the European Union: Baumol's 'cost disease' revisited. European Economy, Economic Papers 507.
Google Scholar
Nässén, J.; Larsson, J.; Holmberg, J. (2009). The Effect of Working Hours on Energy Use: A Micro Analysis of Time and Income Effects. ECEEE Summer Study.
Google Scholar
Nordhaus, W. (2006). Baumol’s Diseases: A Macroeconomic Perspective. NBER Working Paper 12218.
Google Scholar
Pouwels, B.; Siegers, J.; Vlasblom, J. (2008). Income, Working Hours, and Happiness. Economics Letters 99: 72–74.
Google Scholar
Schneider, F.; Kallis, G.; Martinez-Alier, J. (2010). Crisis or opportunity? Economic degrowth for social equity and ecological sustainability. Introduction to this special issue. Journal of Cleaner Production 18: 511–518.
Google Scholar
Schor, J. (2005). Sustainable Consumption and Worktime Reduction. Journal of Industrial Ecology 9(1-2): 37–50.
Google Scholar
van den Bergh, J. (2011a). Energy Conservation More Effective With Rebound Policy. Environ Resource Econ 48: 43–58.
Google Scholar
van den Bergh J. (2011b). Environment versus growth — A criticism of “degrowth” and a plea for “a-growth”. Ecological Economics 70: 881-890.
Google Scholar
Victor, P. (2008). Managing without Growth: Slower by design, not disaster. Advances in Ecological Economics. UK: Cheltenham.
Google Scholar
Victor, P. (2011). Growth, degrowth and climate change: A scenario analysis. Ecological Economics 84: 206-212.
Google Scholar
Wächter, P. (2013). The Impacts of Spatial Planning on Degrowth. Sustainability 5: 1067-1079.
Google Scholar
