Health human capital formation in the OECD: Exploring the role of welfare state composition

Abstract

This study examines the relationship between welfare state or social expenditure composition and health human capital in 37 OECD countries spanning 1980–2018. Our findings confirm that public health spending has a positive effect on health capital formation. Dissecting social expenditure according to other nine social spending categories reveals a positive influence for old age pensions and unemployment benefits. The results for the remaining social programs vary with the health capital proxy and estimation method used. It thus appears that more comprehensive and universal social programs, possibly by guaranteeing the necessary income, do a better job in improving health human capital