Scandinavian Working Papers in Economics

SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

No 115: Redistributive Effects of the Swedish Health Care Financing System

Ulf-G. Gerdtham () and Gun Sundberg
Additional contact information
Ulf-G. Gerdtham: Centre for Health Economics, Postal: Stockholm School of Economics, Box 6501, 113 83 Stockholm, Sweden
Gun Sundberg: Department of Economics, Postal: Uppsala University, Box 513, S-751 20 Uppsala, Sweden

Abstract: The paper investigates the redistributive effects of the Swedish health care financing system in 1980 and 1990 for four different financial sources: County council taxes, payroll taxes, direct payments oand state grants. The redistributive effects are decomposed into vertical, horizontal and reranking segments for each of the four financial sources. The data used in this study is based on probability samples of the Swedish population, the Level of Living Survey (LNU) from 1981 and 1991. The paper concludes that the Swedish health care financing system is weakly progressive, although direct payments are regressive. There are some horizontal inequity and reranking, which mainly comes from the county council taxes, since those tax rates vary for each county councils. The implication is that, to some extent, people with equal income are treated unequally.

Keywords: Equity; health care; financing; redistributive effects

JEL-codes: D3; D63

48 pages, June 1996

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