Investing in health: the relationship between public health spending and health in the EU

Abstract

In the following study, I analyze the relationship between healthcare expenditure and life expectancy in 31 European Union member countries, excluding Norway and Iceland, from 2011 to 2020. Using time series and cross-sectional data, four variables were examined: healthcare expenditure as a percentage of GDP, per capita GDP, poverty, and R&D expenditure. Life expectancy was used as a health indicator. Four different models were estimated using the panel data technique, and the random effects estimation was selected as the most efficient. The results indicate a positive relationship between healthcare expenditure and life expectancy in the European Union.