Greenhouse gas emissions, economic globalization, and health expenditures nexus: does population aging matter in emerging market economies?

Abstract

Papers on population aging and the effects of environmental quality on health expenditure have critical policy consequences. However, findings in the relevant literature are mixed, and papers generally focus on developed countries. To provide new information to the literature, this paper examines the impact of globalization, economic growth, greenhouse gas emissions, and population aging on health expenditures in emerging market economies with annual data for the period 2000 to 2018. The paper follows a second-generation advanced panel data method that considers cross-sectional dependency. The estimation results reveal that population aging, economic growth, and greenhouse gas emissions have an increasing effect on health expenditures, while globalization has a decreasing effect. Furthermore, one-way causality running from population aging to health expenditures is confirmed, while a feedback causality relationship is observed between health expenditures and other indicators (globalization, economic growth, and greenhouse gas emissions). After all, the outputs of this paper can provide critical policy implications about the relationships between aging, globalization, air quality, and health expenditures in developing countries.