Social Health Insurance Reform and Economic Growth: Simulation Analysis in China
International Journal of Business and Economics Research
Volume 8, Issue 6, December 2019, Pages: 458-468
Received: Nov. 21, 2019; Accepted: Dec. 6, 2019; Published: Dec. 10, 2019
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Lili Zheng, School of Insurance, Central University of Finance and Economics, Beijing, China
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China has implemented drastic reforms in social health insurance within the past decade. I investigate how social health insurance affects economic growth in China by employing a three-period overlapping generations’ model in which social health insurance is determined endogenously. My model consists of three parts: individuals, firms and the government. In my model, social health insurance influences savings, physical capital, human capital and economic growth. I find that the higher the contribution rates of individual accounts to social health insurance, the lower the personal savings rate; with an increase in the personal account payment rate, an increase in the payment rate is associated with an increase in personal account funds, and the medical expenditure will increase; the contribution of each monetary unit will lead to more than one monetary unit of output, representing the multiplier effect of the personal account payment rate on economic growth. So the contribution rates of personal accounts are conducive to physical and human capital accumulation, generating a multiplier effect on economic growth. Simulation results show that a lower rate of pooled account payments and higher rate of personal account payments result in greater economic growth. I also find that the proportion of employment payments transferred to personal accounts positively influences economic growth. The theoretical model and simulation indicate that the reform of social health insurance causes an increase in economic growth.
Social Health Insurance Reform, Physical Capital, Human Capital, Economic Growth
To cite this article
Lili Zheng, Social Health Insurance Reform and Economic Growth: Simulation Analysis in China, International Journal of Business and Economics Research. Vol. 8, No. 6, 2019, pp. 458-468. doi: 10.11648/j.ijber.20190806.26
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