Aging, Health and Aggregate Medical Care Spending in France

Even though institutions rather than ageing influence medical expenditure at the aggregate level, measuring the expected impact of changes in need (age and health status) on expenditure in a given national health care system allows one to assess how institutions allocate resources across ages. I attempt such a decomposition of the variation of medical expenditure between need, socio- economic circumstances and technology in the case of France, using a unique data set at the individual level. I use morbidity as an indicator of health and test for endogeneity of health to expenditure, as well as for temporal stability of the relationship between health and medical care.