Full Length ArticleCan public spending reduce mortality disparities? Findings from East Germany after reunification
Section snippets
Background
There is an ongoing discussion about the relationship between increases in public spending and increases in life expectancy. Most researchers have emphasized the costs associated with rising life expectancy, mainly due to the expenses incurred by older age groups. Some observers have warned that changing age structures within a population and increasing proportions of older age groups will lead to higher public pension costs (Bongaarts, 2004, Jimeno et al., 2008, Börsch-Supan et al., 2003) or
Life expectancy since the 1970s
The changing institutional arrangements in the East after reunification led to a steep increase in life expectancy among East Germans. Prior to reunification, the gap in life expectancy between East and West Germany was large and increasing. In 1970, the average life expectancy for women in the East and the West was about the same, at around 73.5 years; and the average life expectancy for men in the East was actually 0.8 years higher than the 67.3 years for men in the West. However, between 1970
Germany before reunification
East German social policy was geared toward enabling citizens to contribute to the productivity and prosperity of the socialist economic system (Schmidt, 1999). It was intended not only to increase (female) labor market participation, but also to minimize the risk that people would drop out of the labor market. Thus, East German policy was largely focused on current or future workers. The decline in fertility rates during the 1970s coupled with out-migration led to an increased emphasis on
The reunification of Germany
Immediately after the Wall fell, large amounts of money started flowing from West to East. As part of the economic, social, and currency union between the two parts of Germany, the West German government channeled large sums of money into the East in an effort to equalize the infrastructure and living standards across the country. In the early years, more than 160 billion marks were transferred to the East (Wagner, 2001). The social union led to the introduction of the West German social
Data and Methodology
We analyze public pension and public health care data by single years of age for all-cause mortality. The detailed estimates on individual consumption of public expenditures are obtained from the National Transfer Accounts (NTA) database.3 The NTAs provide detailed information about public transfers to the elderly, including
Results
The difference-in-difference approach is not meant to provide an exact measure how much money has to be invested to increase an individual’s life expectancy by one year. In fact, we would prefer to show the potential impact public transfer could have on survival. Therefore, we use this approach as a first step, to show how much money was invested per capita and the corresponding gains in life expectancy. The results from the difference-in-difference model indicate that public spending
Discussion
In this study, we investigate how social security spending in the form of public pension and health care expenditures affects differences in mortality. For the analysis, we use the natural experiment setting provided by the division and reunification of Germany to illustrate how different institutional settings influence observed mortality patterns. We focus on the years 1980 to 2000 because these decades include a period when the life expectancy gap between the two parts of Germany was
Acknowledgments
The authors are grateful to James W. Vaupel and James E. Oeppen for valuable comments and suggestions and to Jutta Gampe for statistical guidance. We also appreciate the helpful comments by two anonymous referees and by Mauricio Avendano Pabon on an earlier version of the manuscript.
References (53)
- et al.
Modelling the impact of aging on social security expenditures
Econ. Model.
(2008) - et al.
The contribution of medical care to changing life expectancy in Germany and Poland
Soc. Sci. Med.
(2002) - et al.
The impact of ageing on hospital care and long-term care – the example of Germany
Health Policy
(2004) - et al.
Income inequality and population health: a review and explanation of the evidence
Soc. Sci. Med.
(2006) - et al.
Population aging: a comparison among industrialized countries
Health Aff.
(2000) Measuring and explaining the change in life expectancies
Demography
(1984)- Beard, R., 1959. Note on Some Mathematical Mortality Models. In: Woolstenholme G.E.W., O’Connor M. (Eds.), Little,...
- et al.
Air pollution and mortality in Central and Eastern Europe
Eur. J. Public Health
(1995) - et al.
East-West mortality divide and its potential explanations: proposed research agenda
Br. Med. J.
(1996) Population aging and the rising cost of public pensions
Popul. Dev. Rev.
(2004)
Pension reform, capital markets and the rate of return
German Econ. Rev.
The value of medical spending in the United States, 1960–2000
New Engl. J. Med.
Health, inequality, and economic development
J. Econ. Lit.
National debt in a neoclassical growth model
Am. Econ. Rev.
Mögliche Ursachen für die rasche Reduktion der ostdeutschen Übersterblichkeit nach der Wiedervereinigung
Zeitschrift für Bevölkerungswissenschaft
Economic transition in Eastern Germany
Brookings Pap. Econ. Act.
Effects of state-level public spending on health on the mortality probability in India
Health Econ.
The impact of public spending on health: does money matter?
Soc. Sci. Med.
Old-age mortality in Germany prior to and after reunification
Demogr. Res.
Differential Mortality in the United States: A Study of Socioeconomic Epidemiology
The Individual Economic Lifecycle and Its Fiscal Implications in an Aging Germany – Findings from National Transfer Accounts. PhD thesis
Cited by (21)
Impact of Subsidy on the Use of Personalized Medicine in Breast Cancer
2022, Value in Health Regional IssuesCitation Excerpt :This can greatly increase treatment uptake and rates of survival among patients with breast cancer. Subsidies increase the ease to access for healthcare through decreasing the cost of treatment and also lead to a general increase in treatment uptake.26 Our study showed that both educational and marital gradients are moderated with the introduction of subsidies to Herceptin.
Shorter lives in stingier states: Social policy shortcomings help explain the US mortality disadvantage
2016, Social Science and MedicineCitation Excerpt :For example, research by Mackenbach et al. (2011a, b) found that inequality related losses to health amount to more than 700,000 deaths per year and 33 million prevalent cases of ill health in the European Union. Third, it is possible that social policy itself is affected by population-health improvements, such that part of any association between social policy and population health might result from the endogeneity of social policy generosity to the health of the population, and especially the health of older cohorts, which can be expected to be larger in healthier societies, ceteris paribus (Mackenbach et al., 2011a, b; Vogt and Kluge, 2015; Gunasekara et al., 2014). Indeed, the effect of population aging on social policy is well established in the comparative political economy literature (Wilensky, 2002).
The weaker sex? Vulnerable men and women's resilience to socio-economic disadvantage
2016, SSM - Population HealthCitation Excerpt :For completeness we depict the somewhat “melded” experience of Germany (Fig. S10). Like other non-FSU Warsaw pact countries, men faltered in the late 80's and even more so after the collapse of the Berlin wall, but since have followed a more typical “Group 1” pattern as part of greater Germany (Vogt & Kluge, 2014). Because of the historic heavier use of alcohol in this region of the world than any other, and the plausibility of its role as mediator for mortality rate gyrations, toxic levels of alcohol consumption have been the focus of much study (Gerry, 2012; Mckee & Shkolnikov, 2001; Murphy, Bobak, Nicholson, Rose, & Marmot, 2006; Tulchinsky & Varavikova, 1993; Weidner & Cain, 2003; Zaridze et al., 2014; Zatoński, 2011).
How socio-political change is associated with the number of individually reported negative life events: a population-based study using the German reunification 1989/1990 as an example
2024, Journal of Epidemiology and Community HealthThe underwhelming German life expectancy
2023, European Journal of Epidemiology