Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/115349
Authors: 
Huang, Xianguo
Yoshino, Naoyuki
Year of Publication: 
2015
Series/Report no.: 
ADBI Working Paper Series 533
Abstract: 
This paper studies the impact of tax-financed universal health coverage schemes on macroeconomic aspects of labor supply, asset holding, inequality, and welfare, while taking into account features common to developing economies, such as informal employment and tax avoidance, by constructing a dynamic stochastic general equilibrium model with heterogeneous agents. Agents have different education levels, employment statuses, and idiosyncratic shocks. Given three tax financing options, calibration results suggest that the financing options matter for outcomes both at the aggregate and disaggregate levels. Universal health coverage, financed by labor income tax revenue, could reduce inequality due to its large redistributive role. Social welfare cannot be improved when labor decisions are endogenous and distortions are higher than the redistributive gains for all tax financing options. In the absence of labor supply choice, mild welfare gains are found.
Subjects: 
universal health coverage
DSGE model
idiosyncratic shocks
social welfare
JEL: 
E24
E26
E62
J11
H23
H51
Document Type: 
Working Paper

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