Is public health insurance an appropriate instrument for redistribution?

Abstract

The share of the public sector in health insurance provision varies enormously from country to country. It is larger in more redistributive countries. We provide a possible theoretical explanation for these facts: a public health insurance system, fi nanced by taxes, can be an effi cient means of redistribution, complementary to income taxation. This relies on the assumption of a negative correlation between income and morbidity. We examine the empirical validity of this assumption on macro data.

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