Social Health Insurance Reform and Economic Growth: Simulation Analysis in China

Lili Zheng

doi:doi:10.11648/j.ijber.20190806.26

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Social Health Insurance Reform and Economic Growth: Simulation Analysis in China

Lili Zheng

Published in International Journal of Business and Economics Research (Volume 8, Issue 6)

Received: 21 November 2019 Accepted: 6 December 2019 Published: 10 December 2019

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Abstract

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.

Published in	International Journal of Business and Economics Research (Volume 8, Issue 6)
DOI	10.11648/j.ijber.20190806.26
Page(s)	458-468
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2019. Published by Science Publishing Group

Keywords

Social Health Insurance Reform, Physical Capital, Human Capital, Economic Growth

References

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[21]	Bellettini G. and C. B. Ceroni, 2000, Social security expenditure and economic growth: an empirical assessment, Research in Economics, 54 (3): 249-275.
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Lili Zheng. (2019). Social Health Insurance Reform and Economic Growth: Simulation Analysis in China. International Journal of Business and Economics Research, 8(6), 458-468. https://doi.org/10.11648/j.ijber.20190806.26

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Lili Zheng. Social Health Insurance Reform and Economic Growth: Simulation Analysis in China. Int. J. Bus. Econ. Res. 2019, 8(6), 458-468. doi: 10.11648/j.ijber.20190806.26

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Lili Zheng. Social Health Insurance Reform and Economic Growth: Simulation Analysis in China. Int J Bus Econ Res. 2019;8(6):458-468. doi: 10.11648/j.ijber.20190806.26

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@article{10.11648/j.ijber.20190806.26,
  author = {Lili Zheng},
  title = {Social Health Insurance Reform and Economic Growth: Simulation Analysis in China},
  journal = {International Journal of Business and Economics Research},
  volume = {8},
  number = {6},
  pages = {458-468},
  doi = {10.11648/j.ijber.20190806.26},
  url = {https://doi.org/10.11648/j.ijber.20190806.26},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20190806.26},
  abstract = {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.},
 year = {2019}
}

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TY  - JOUR
T1  - Social Health Insurance Reform and Economic Growth: Simulation Analysis in China
AU  - Lili Zheng
Y1  - 2019/12/10
PY  - 2019
N1  - https://doi.org/10.11648/j.ijber.20190806.26
DO  - 10.11648/j.ijber.20190806.26
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 458
EP  - 468
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20190806.26
AB  - 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.
VL  - 8
IS  - 6
ER  -

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Author Information

Lili Zheng

School of Insurance, Central University of Finance and Economics, Beijing, China

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Plain Text BibTeX RIS

APA Style

Lili Zheng. (2019). Social Health Insurance Reform and Economic Growth: Simulation Analysis in China. International Journal of Business and Economics Research, 8(6), 458-468. https://doi.org/10.11648/j.ijber.20190806.26

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ACS Style

Lili Zheng. Social Health Insurance Reform and Economic Growth: Simulation Analysis in China. Int. J. Bus. Econ. Res. 2019, 8(6), 458-468. doi: 10.11648/j.ijber.20190806.26

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AMA Style

Lili Zheng. Social Health Insurance Reform and Economic Growth: Simulation Analysis in China. Int J Bus Econ Res. 2019;8(6):458-468. doi: 10.11648/j.ijber.20190806.26

Copy | Download

@article{10.11648/j.ijber.20190806.26,
  author = {Lili Zheng},
  title = {Social Health Insurance Reform and Economic Growth: Simulation Analysis in China},
  journal = {International Journal of Business and Economics Research},
  volume = {8},
  number = {6},
  pages = {458-468},
  doi = {10.11648/j.ijber.20190806.26},
  url = {https://doi.org/10.11648/j.ijber.20190806.26},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20190806.26},
  abstract = {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.},
 year = {2019}
}

Copy | Download

TY  - JOUR
T1  - Social Health Insurance Reform and Economic Growth: Simulation Analysis in China
AU  - Lili Zheng
Y1  - 2019/12/10
PY  - 2019
N1  - https://doi.org/10.11648/j.ijber.20190806.26
DO  - 10.11648/j.ijber.20190806.26
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 458
EP  - 468
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20190806.26
AB  - 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.
VL  - 8
IS  - 6
ER  -

Copy | Download