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Advances in Social Sciences Research Journal – Vol.8, No.1

Publication Date: January 25, 2021

DOI:10.14738/assrj.81.9572.

Si, X. (2021). Environmental Pollution, Population Aging And Social Medical Insurance Fund Expenditure. Advances in Social Sciences

Research Journal, 8 (1) 599-609.

Environmental Pollution, Population Aging And Social Medical

Insurance Fund Expenditure

Xu Si

School of Insurance, Central University of

Finance and Economics, China;

ABSTRACT

Although China's economy has maintained rapid growth since 21st

century, the problem of environmental pollution has become

increasingly serious. Environmental pollution has a serious impact on

people in all aspects of clothing, food, housing and transportation.

Based on the panel data of 31 provinces and regions in China from

2005 to 2017, this paper establishes a fixed-effect model and divides

China into three regions of central, east and west and analyzes the

impact of environmental pollution and the population aging on the

expenditure of China's social medical insurance funds (SMIF). The

study found that the more severe environmental pollution, the worse

health status of the residents, then induces the higher SMIF; the more

serious aging of population, the higher risk of disease and cause higher

SMIF. It is recommended to innovate clean energy technologies,

increase environmental governance, in order to reduce health care

expenditures and restrain the increase of the health care cost.

Keywords: environmental pollution; population aging; expenditure of SMIF;

environmental governance.

INTRODUCTION

The deterioration of environmental pollution is caused by population growth, increased economic

activities, increased motor vehicle flow, and increased intensity and frequency of sandstorms,

which in turn increases the consultation rate and mortality rate of the respiratory system and

other related diseases. In recent years, China's medical expenses, outpatients, the number of

inpatients, expenditure, and so on have increased sharply. Problems such as excessive

consumption of resources and ecological destruction also hinder economic development and the

improvement of life quality. In fact, the impact of environmental pollution on human health has

aroused widespread concern.

From a global perspective, the economic cost of 34 OECD countries dying from ambient air

pollution increased by about 7% between 2005 and 2010, reaching a huge loss of US $1.6 trillion

in 2010 [1]. PHE (2018) believes that the main environmental cause of premature mortality is air

pollution, accounting for about 5% of global deaths [2]. Unless the air is purified, by the middle of

this century, one person will die prematurely from air pollution every five seconds (OECD,2016)

[3]. The European Commission (2018) predicts that 6 to 9 million premature deaths will occur

each year by 2060, based on scenarios of rising PM2.5 and ozone levels [4]. Epidemiological

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Advances in Social Sciences Research Journal (ASSRJ) Vol.8, Issue 1, January-2021

related research evidence supports the estimate of the death toll, while economic research

evidence shows that global environmental and household air pollution also causes trillions of

dollars in economic losses to society every year [5].

The extensive damage of environmental pollution to human health has attracted more and more

attention. In particular, air pollution and its harm to health are particularly prominent in the

environment. According to the report on the state of the ecological environment in China in 2018,

the ambient air quality of 217 of the 338 cities exceeded the standard, accounting for 64.2%.

REVIEW OF EXISTING RESEARCH

Health of Residents and Economic growth

The research on the impact of environmental pollution on residents' public health has always

been a topic of concern. There is growing evidence that environmental pollution will lead to a

decline in the health of human and other species. Rico, Iris et al. (2005) used OLS model to study

the effects of health on economic growth. Taking capital growth, labor force participation rate,

education level, lifestyle, environment and health services as independent variables, it is

concluded that all variables are positively correlated with economic growth. The study also shows

that improved health contributes to economic growth, thereby reducing poverty [6]. Pan, Chen et

al. (2014) found that traffic and industry-related pollutants (CO, NO2) affected the number of

hospitalizations and outpatients for asthma. The increase of emergency department and

hospitalization of asthma is related to the increase of O3, SO2, and PM10 levels [7]. WTO (2016)

found that children under the age of 5 in low-income countries are more than 60 times more likely

to die from air pollution than children in high-income countries. Air pollution is not only a health

risk but also hinders development, resulting in the loss of productive labor and reducing national

income [8]. Daniel, Ramona et al. (2019) took the relevant data of EU countries from 2000 to 2014

as an example to investigate the effects of economic growth, environmental pollution, and non- communicable diseases on health expenditure. The results show that GDP has the greatest impact

on health expenditure. In the long run, countries with higher GDP per capita have greater potential

for health expenditure growth. The impact of CO2 emissions on health expenditure depends on

economic growth, which in turn leads to higher health expenditure [9].

Medical Expenses of Residents and SMIF Expenditure

Scholars have also carried out a lot of research on the impact of environmental pollution on

medical expenses of residents and SMIF expenditure. Karatzas (2000) found that income, the

number of doctors, nurses and health management costs have a positive impact on health

expenditure, while the health price index, the number of hospital beds and cities with a population

of more than 100000 in the United States have a very significant negative impact on health

expenditure [10]. Jerrett, Eyles et al. (2003) found that areas with high pollution output in Ontario,

Canada tend to have higher per capita medical expenditure, while areas that spend more on

protecting environmental quality have lower spending on health care [11]. Yazdi, Tahmasebi et al.

(2014) examined the role of environmental quality and income in determining health

expenditures in Iran during 1967-2010, where pollutant emissions had a statistically significant

positive impact on health expenditures in both the short and long term [12]. Preker, Adeyi et al.

(2016) found that cancer, chronic respiratory diseases, and cardio-cerebrovascular diseases were

the most expensive medical items related to pollution [13]. Raeissi, Khalilabad (2018) found that

long-term air pollution had a significant positive impact on health costs. For every 1.00% increase

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Si, X. (2021). Environmental Pollution, Population Aging And Social Medical Insurance Fund Expenditure. Advances in Social Sciences Research Journal, 8

(1) 599-609.

URL: http://dx.doi.org/10.14738/assrj.81.9572. 601

in the carbon dioxide index, public health costs increased by 3.32% and private health costs

increased by 1.16% [14]. Blázquez, Cantarero et al. (2019) analyzed the relationship between air

pollution and health expenditure in 29 OECD countries between 1995 and 2014. The results show

that per capita income has a positive impact on health expenditure, but after the inclusion of lag

time, its statistical significance is not as good as expected [15]. Tianlei, Hongyan et al. (2019)

found that there is a negative correlation between air pollution and medical insurance: the higher

the degree of air pollution, the worse the self-rated health status, and the less chance to buy

medical insurance. Air pollution affects the health of the elderly, which indirectly has a negative

impact on the cost of health insurance costs [16]. Fengyi, Li et al. (2020) used the generalized

additive model of Poisson distribution to prove that air pollution hurts the hospitalization cost of

asthma, in which male and non-elderly subgroups are more significant than female and elderly

subgroups [17].

Overview

Scholars in related fields have also measured the increase in mortality and morbidity related to air

pollution. As there is growing evidence of the cumulative effects of air pollution on health, WHO

and European governments have begun to use the data from these studies to inform

environmental policies. This paper explores the impact of environmental pollution and population

aging on SMIF expenditure.

MATERIALS AND METHODS

Research Hypothesis

Hypothesis 1 (H1): The more serious the environmental pollution, the worse the health status of

residents, and the higher the SMIF expenditure.

Hypothesis 2 (H2): The more serious the aging of the population, the higher the risk of disease,

and the higher the cost of SMIF.

Sources of Data and Variables

The study selects the panel data of 31 provinces in China from 2005 to 2017, the data source from

China Statistical Yearbook and provincial statistical yearbooks. The explained variable is SMIF

expenditure, and the main explanatory variables are environmental variables and population

aging variables. Other variables include the number of people participating in social medical

insurance, the level of economic development, the economic level of residents, the health level of

residents, the education level of residents, and medical expenditure of residents (See Table 1).

Sample characteristics are presented in Table 2.