Previous studies have shown that social spending is associated with better health outcomes in OECD countries. This exploratory study builds on this finding by widening the scope of the analysis, by incorporating other societal factors — namely, social capital and income inequality — and by assessing these relationships not only at the cross-national level but also at the cross-state level within the United States.

Are better health outcomes related to social expenditure?

A cross-national empirical analysis of social expenditure and population health measures

Jennifer Rubin, Jirka Taylor, Joachim Krapels, Alex Sutherland, Melissa Francisca Felician, Jodi L. Liu, Lois M. Davis, Charlene Rohr

ResearchPublished May 10, 2016

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Previous studies have shown that social spending and the ratio of social to health spending are associated with better health outcomes in OECD countries. This exploratory study builds on this finding by widening the scope of the analysis, by incorporating other societal factors — namely, social capital and income inequality — and by assessing these relationships not only at the cross-national level but also at the cross-state level within the United States.

The findings of the study are based on analyses of large longitudinal cross-national data sets on social spending, health outcomes and wider societal factors.

The study confirmed earlier findings of a positive association between higher social spending and improved health outcomes, even when this is tested in many different ways. Public social expenditure by governments seems to have a particularly strong relationship with health outcomes. Disaggregating social spending by type of programme, some areas of social expenditure, such as old-age spending, appear more strongly positively related to better health outcomes than others. In addition, better health outcomes seem to be even more evident when the data are looked at over a longer time period from when the social expenditure occurs — perhaps because social expenditure can take time to translate into better health outcomes.

Wider contextual factors also appear to matter. Countries with higher levels of trust in others tend to have both higher levels of social spending and better health outcomes. Also, higher inequality is associated with an even stronger association between social spending and health outcomes.

Key Findings

  • Countries with greater social expenditure have better health outcomes, even when this is tested in many different ways.
  • Public social expenditure by governments seems to have a particularly strong relationship with health outcomes.
  • Some areas of social expenditure, such as old-age spending, appear more strongly positively related to better health outcomes than others. In addition, the strength (and at times direction) of the relationship with better health outcomes varies depending on the area of social expenditure (e.g. unemployment, family programmes etc.).
  • Better health outcomes seem to be even more evident when time lags between health outcomes and when the social expenditure occurs are incorporated in the analysis -- perhaps because social expenditure can take time to translate into better health outcomes. We tested time lags of various lengths and found that the associations get somewhat stronger with lags greater than seven years.
  • Countries with higher levels of trust in others tend to have both higher levels of social spending and better health outcomes.
  • Higher inequality is associated with an even stronger association between social spending and health outcomes. In other words, social protection may be more important for health outcomes in more unequal societies.
  • There is also a strong positive relationship between social expenditure and health outcomes across US states. As with our cross-national analysis, the associations differed depending on the type of expenditure, with the strongest results for unemployment and income maintenance payments.

Recommendations

  • As next steps, we suggest broadening of the analysis to include further contextual factors that may affect the relationship between social spending and health outcomes.
  • In addition, we suggest deepening of the analysis to explore the pathways and mechanisms from social spending to health outcomes and the role of social programme's design and implementation.

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Rubin, Jennifer, Jirka Taylor, Joachim Krapels, Alex Sutherland, Melissa Francisca Felician, Jodi L. Liu, Lois M. Davis, and Charlene Rohr, Are better health outcomes related to social expenditure? A cross-national empirical analysis of social expenditure and population health measures, RAND Corporation, RR-1252-RC, 2016. As of September 17, 2024: https://www.rand.org/pubs/research_reports/RR1252.html
Chicago Manual of Style
Rubin, Jennifer, Jirka Taylor, Joachim Krapels, Alex Sutherland, Melissa Francisca Felician, Jodi L. Liu, Lois M. Davis, and Charlene Rohr, Are better health outcomes related to social expenditure? A cross-national empirical analysis of social expenditure and population health measures. Santa Monica, CA: RAND Corporation, 2016. https://www.rand.org/pubs/research_reports/RR1252.html.
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