Remittances and Healthcare Expenditures: Evidence from Pakistan

Karim Khan, Muhammad Jehangir Khan, Abid Hussain

Abstract


This study, examines the effect of remittances on healthcare
expenditure in Pakistan by utilising the Pakistan Social and Living
standards Measurement (PSLM) survey. The total healthcare expenditure is
classified into two categories, i.e. expenditure on medicines and
expenditure on clinical services. The study analyses these categories in
case of both rural and urban areas of the country. Such data is
generally characterised by selection bias; therefore, we employ
Propensity Score Matching (PSM) instead of the commonly used econometric
techniques. Findings of the study indicate that remittances enhance
spending on both the clinical services and medicines. This result is
robust across the urban and rural areas of Pakistan. The comparison
between the clinical services and medicines shows that the impact is
higher on clinical services as compared to the impact on medicines. This
suggests that remittances help to improve the preventive nature of
health outcomes in Pakistan. JEL Classification: D10; I21; O15 Keywords:
Remittances, Healthcare Expenditure, Medical Expenditure, Clinical
Expenditure, Propensity Score Matching

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DOI: https://doi.org/10.30541/v60i2pp.175-200

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