DP13131 The human side of austerity: health spending and outcomes during the Greek crisis

Author(s): Roberto Perotti
Publication Date: August 2018
Keyword(s): Fiscal austerity, Greek crisis, Health crisis
JEL(s): E62, H51, I18
Programme Areas: Public Economics, Macroeconomics and Growth
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=13131

The Greek crisis was the most severe in postwar Europe; its budget cuts were the deepest. Among the components of the budget, health spending was hit particularly hard, declining by more than one third in just five years. This paper has two goals: establish the facts about health inputs, outputs and outcomes during the Greek crisis, and explore the connection between budget cuts and health outcomes. Health spending and inputs were very high in Greece before the crisis: in several dimensions, even after the budget cuts were implemented health spending and inputs were still at or near the top of the European countries; in other cases they merely went back to the European average. Nevertheless, budget cuts so deep and so sudden are unlikely to merely cut into inefficiencies and overcapacities. I highlight several areas in which a comparative quantitative analysis suggests that budget cuts might have had an appreciable effects on the health of the population.