The Relationship between Life Expectancy at Birth and Health Expenditures Estimated by a Cross-country and Time-series Analysis

In the last years, most countries experienced improved health outcomes as longevity increased steadily and infant mortality rate decreased, along with a growth of the health expenditures. The paper aims to analyze the relationship between the dynamics of the inputs and the outputs of health care systems. The input of the health care system is expressed by health care expenditures per capita (current US$) and the output of the health care systems is expressed by life expectancy at birth (years). The data are collected for 175 world countries, grouped according to the geographic position and income level, over 16 years (1995-2010). We apply a panel data analysis to estimate life expectancy by a function of health expenditures. The obtained results show a significant relationship between health expenditures and life expectancy. Country effects are significant and show the existence of important differences among the countries.