Health Care Expenditure over Life Cycle in the People's Republic of China

We use individual level data from eight waves of the China Health and Nutrition Survey during 1991–2011 to investigate age profiles of health expenditure for rural and urban residents in the People's Republic of China (PRC). Employing a two-part model, we find that health expenditure of rural residents is averagely 33% lower than that of urban residents and age–expenditure profile is much steeper in urban areas than in rural areas. However, there is no evidence that the health status of the rural elderly is better than that of the urban elderly. The findings imply that health spending of the rural elderly may increase more during the process of rural–urban integration. In addition, we find a significant difference in age–expenditure profiles across time. Compared with expenditure during 1991–2000, the estimated age-expenditure profile becomes steeper during 2004–2011 in both urban and rural areas.