Health Expenditures and Global Inequalities in Longevity

Longevity is a key health and development indicator used for cross-country comparisons. Evidence on the effects of country health expenditures on longevity is mixed. We evaluate the heterogeneity in country health expenditure effects throughout the life expectancy distribution worldwide during 2006-11 using quantile regression and an assembled dataset on 175 countries that includes both historic as well as recent data on life expectancy. Our goal is to evaluate the effects of health expenditures across quantiles of the country-level life expectancy distribution to understand whether increasing expenditures are associated with changes in longevity disparities between countries. We find significant heterogeneity in expenditure effects on life expectancy. The largest returns from increased spending are at the left margin of the life expectancy distribution. The results suggest that increasing health spending in countries with low life expectancy may have important returns to life expectancy and significantly diminish global inequalities in longevity and development by reducing the spread of the world's life expectancy distribution.