The spillover effect of fiscal environmental protection spending on residents' medical and healthcare expenditure: evidence from China

The Chinese government has not only been increasing investments in environmental protection, improving the quality of the ecological environment, but has also been focusing on curbing the excessive growth of medical and healthcare expenses so as to ease the economic burden of China's residents. Both aspects are significant concerns worldwide and have received much research attention individually, but the relationship between government environmental protection expenditure and residents' medical and healthcare expenditure remains unclear. Based on panel data from 31 provinces in China from 2007 to 2019, this paper empirically reveals that fiscal environmental protection expenditure is significantly negatively correlated with per capita medical and healthcare expenditure of residents (including outpatient expenditure and inpatient expenditure). This study shows that increasing the fiscal environmental protection expenditure can help curb the rising level of residents' medical and healthcare expenditure. In addition, the results of heterogeneity analysis indicate that the above relationship is stronger in provinces with a relatively low level of economic development or low proportion of the population over 65 years old. Management implications are discussed.

Automated summary

The Chinese government's increased investment in environmental protection is found to be significantly negatively correlated with residents' medical and healthcare expenditure, particularly in provinces with lower economic development or a lower proportion of the elderly population. These findings highlight the potential benefits of fiscal environmental protection expenditure in curbing rising healthcare costs for residents.