№ 2019/1
Economy under the conditions of modern transformations
STEPANOVA Olena 1
1Institute for Economics and Forecasting, NAS of Ukraine
Fiscal sustainability under the conditions of emerging longevity economy
ABSTRACT ▼
The article investigates the influence of the growing public expenditures on health caused by the demographic aging of the population, on the stability of public finances in the context of the establishment of the "longevity economy". The author conducts a scenario based assessment of the sustainability of public finances in Ukraine in the medium and long term, based on the calculation of the fiscal gap indicator.
In particular, investigated the "stress effect" of the changes in the indicators of macroeconomic development and the fiscal position on the sustainability of public finances under the condition of realization of the historical scenario. The author proves a significant influence of demographic aging of Ukraine's population on the sustainability of public finance. It is determined that in the long term there will be a fundamental transformation of the "spending profile" in the health care by sex-age groups, which, for example, is due to a shift in consumption of these expenditures by the population of older age groups and their increased share.
The author substantiates the necessity to expand the fiscal space for fulfilling the normative requirements of the Ukrainian legislation on health financing based on the calculation of the necessary structural primary balance to overcome the fiscal gap, which is proposed to be used as one of the benchmarks for the implementation of fiscal policy in order to attain medium and long-term sustainability of public finances for a given period of fiscal adjustment. It is proposed: to monitor and control the pace and the growth factors of health care expenditures in the medium and long-term; to develop indicators for assessing the fiscal space for healthcare with due regard to potential change in the demographic structure of the population; to assess the transformation of the fiscal space to finance the health care in the context of the establishment of the longevity economy while respecting the sustainability of the system of public finances.
Keywords: fiscal sustainability, public finances, health care, fiscal gap, demographic aging, fiscal space, age-related costs
JEL: H51, H68, E62
| Article in Ukrainian (pp. 35 - 50) | Download | Downloads :531 |
REFERENCES ▼
1. Diton, A. (2016). Big escape: health, wealth and sources of inequality. Moscow: Izd-vo Instituta Gajdara; Fond Liberal'naja Missija [in Russian].
2. World Population Prospects: The 2017 Revision, Key Findings and Advance Tables. Working Paper. Retrieved from
esa.un.org/unpd/wpp/Publications/Files/WPP2017_KeyFindings.pdf
3. The Longevity Economy (2016). Generating economic growth and new opportunities for business. Oxford Economics. Retrieved from
www.aarp.org/content/dam/aarp/home-and-family/personal-technology/2013-10/Longevity-Economy-Generating-New-Growth-AARP.pdf
4. Zhavoronkov, A. (2013). The ageless generation: how advances in biomedicine will transform the global economy. New York: Palgrave Macmillan.
5. OECD (2015). Fiscal sustainability of health systems: bridging health and finance perspectives. Paris. Retrieved from
www.oecd-ilibrary.org/social-issues-migration-health/fiscal-sustainability-of-health-systems_9789264233386-en
6. OECD (2019). Fiscal sustainability of health systems: Enhancing the dialogue. Retrieved from
www.oecd.org/els/health-systems/OECD-Fiscal-Sustainability-of-Health-Systems-Brochure-2019.pdf
7. National Health Expenditure Fact Sheet. U.S. Centers for Medicare & Medicaid Services. Retrieved from
www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/nhe-fact-sheet.html
8. State And Local Governments' Fiscal Outlook: 2018 Update. U.S. Government Accountability Office (GAO) Report to the Congress. Retrieved from
www.gao.gov/assets/700/696016.pdf
9. Blanchard, O., Chouraqui, J., Hagemann, R. (1990). The Sustainability of Fiscal Policy: New Answers to an Old Question. OECD Economic Studies, 15. Retrieved from
papers.ssrn.com/sol3/papers.cfm?Abstract_id=227461
10. Auerbach, A., Gokhale, J., Kotlikoff, L. (1994). Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy. Journal of Economic Perspectives, 73-94. doi:
doi.org/10.1257/jep.8.1.73
11. Auerbach, A. (2011). Long-term fiscal sustainability in major economies. Bank for International Settlements Working Papers. doi:
doi.org/10.2139/ssrn.1971166
12. Auerbach, A., Gorodnichenko, Y. (2017). Fiscal stimulus and fiscal sustainability. NBER Working Paper, 23789. doi:
doi.org/10.3386/w23789
13. Nagarajan, N. (2016). The impact of an ageing population on economic growth: an exploratory review of the main mechanisms. Analise Social, 51: 218, 42-35. Retrieved from
www.jstor.org/stable/43755167
14. Birch, S. Improving the Fiscal and Political Sustainability of Health Systems through Integrated Population Needs-Based Planning. London: Office of Health Economics. Retrieved from
www.ohe.org/system/files/private/publications/415%20-%20Improving%20fiscal%20and%20political%20sustainability%20of%20health%20systems.pdf?download=1
15. The 2017 Long-Term Budget Outlook. Congressional Budget Office USA. Retrieved from
www.cbo.gov/system/files/115th-congress-2017-2018/reports/52480-ltbo.pdf
16. Fiscal Sustainability Report 2017. Office of the Parliamentary Budget Officer. Retrieved from
www.pbo-dpb.gc.ca/web/default/files/Documents/Reports/2017/FSR%20Oct%202017/FSR_2017_FINAL_EN.pdf
17. Licchetta, M., Stelmach, M. (2016). Fiscal sustainability and public spending on health. Retrieved from
budgetresponsibility.org.uk/docs/dlm_uploads/Health-FSAP.pdf
18. Ebert, W. The German Fiscal Sustainability Report - Rationale, Methodology, Long-term Policy. Retrieved from
www.bundesfinanzministerium.de/Content/DE/Standardartikel/Themen/Oeffentliche_Finanzen/Tragfaehige_Staatsfinanzen/2016-11-07-deutsch-koreanisches-expertenforum-anlage.pdf?__blob=publicationFile&v=3
19. OECD (2015). Fiscal sustainability of health systems: bridging health and finance perspectives. Paris. Retrieved from
www.oecd-ilibrary.org/social-issues-migration-health/fiscal-sustainability-of-health-systems_9789264233386-en
20. Resolution of the Cabinet of Ministers of Ukraine 'On Approval of the Concept of Health Care Financing Reform', dated November 30, 2016 No. 1013-r. Retrieved from
zakon3.rada.gov.ua/laws/show/1013-2016-%D1%80 [in Ukrainian].
21. Law of Ukraine 'On State Financial Guarantees of Medical Care of the Population' dated 19.10.2017, No. 2168-VIII. Retrieved from
zakon5.rada.gov.ua/laws/show/2168-19 [in Ukrainian].
22. Fiscal Sustainability Report 2015 (2016). European Economy Institutional Papers, 018. Retrieved from
ec.europa.eu/info/sites/info/files/file_import/ip018_en_2.pdf
23. Structural budget balances in EU Member States. Retrieved from
www.europarl.europa.eu/RegData/etudes/BRIE/2017/587388/IPOL_BRI(2017)587388_EN.pdf
24. Debt Sustainability Monitor 2017 (2018). European Economy Institutional Papers, 071. Retrieved from
ec.europa.eu/info/sites/info/files/economy-finance/ip071_en.pdf
25. Fiscal Sustainability Report 2018 (2019). European Economy Institutional Papers, 094. Retrieved from
ec.europa.eu/info/sites/info/files/economy-finance/ip094_en_vol_1.pdf
26. IMF (April 2019). World Economic Outlook Database. Retrieved from
www.imf.org/external/pubs/ft/weo/2019/01/weodata/index.aspx
27. State Statistics Committee of Ukraine. Distribution of permanent population by gender, age groups in 2002-2017. Retrieved from
database.ukrcensus.gov.ua/MULT/Dialog/statfile_c.asp [in Ukrainian].
28. Resolution of the Cabinet of Ministers of Ukraine 'On Approval of the Formula for the Distribution of the Amount of Medical Subvention from the State Budget to Local Budgets' of August 19, 2015, No. 618. Retrieved from
zakon5.rada.gov.ua/laws/show/618-2015-%D0%BF [in Ukrainian].
29. Demographic forecasts of the Ptoukha Institute for Demography and Social Studies of the National Academy of Sciences of Ukraine. Retrieved from
www.idss.org.ua/monografii/popforecast2014.rar [in Ukrainian].
30. Law of Ukraine 'On State Financial Guarantees of Medical Care of the Population' dated October 19, 2017 No. 2168-VIII (2018). Vidomosti VRU – Information of VRU, 5, 31 [in Ukrainian].
English
Русский 
Ukrainian 
