Over the last two decades, the Peruvian government has made great efforts to improve access to health care by significantly augmenting the coverage of the non-contributory public health care system Seguro Integral de Salud (SIS). This expansion has a positive impact on welfare and public health indicators, as it limits the risk of catastrophic health-related costs for previously uninsured individuals and allows for the appropriate treatment of illnesses. However, it also entails some unintended consequences for informality, tax revenues, and GDP, since a few formal agents are paying for a service that the majority of (informal) agents receive for free. In this paper, we use a general equilibrium model calibrated for Peru to simulate the expansion of SIS to quantify the unintended effects. We find that overall welfare increases, but informality rises by 2.7 percent, while tax revenues and output decrease by roughly 0.1 percent. Given the extent of the expansion in eligibility, the economic relevance of these results seems negligible. However, this occurs because the expansion of coverage was mostly funded by reducing the spending per-insured person. In fact, we find larger costs if public spending is increased to improve the quality of service given universal coverage.
The COVID-19 pandemic and the August 2020 coup d’état have disrupted more than half a decade of strong economic performance, during which growth averaged 5 percent.1 Growth is projected to decline from 5 percent to -2 percent in 2020 both on account of the pandemic (reflecting a slowdown in external demand, travel, and FDI, as well as the impact of uncertainty and reduced mobility on domestic demand) and of post-coup disruptions in trade, transport, economic and financial flows following the sanctions imposed by the Economic Community of West African States (ECOWAS). Inflation accelerated slightly in recent months but is expected to remain below 2 percent, while the current account deficit is projected to narrow due to higher gold prices (main export) and lower oil prices (main import). Risks around the outlook are exceptionally high in light of the uncertainty surrounding the political transition, the impact of the sanctions on trade and overall activity, and continued deterioration in the security situation. Weak social safety nets amid high informality, food insecurity and a fragile healthcare system exacerbate challenges.
International Monetary Fund. External Relations Dept.
This paper focuses on millennials who are increasingly looking to find their way in the sharing economy, a phenomenon made possible by the emergence of digital platforms that facilitate the matching of buyer and seller. Jobs in the sharing economy—like driving for Uber or Lyft—help some millennials make ends meet, even if such temporary gigs are a far cry from the fulltime jobs with traditional pension plans and other benefits their parents often enjoyed. This generation also enthusiastically embraces the services of the sharing economy, which provides access to everything from beds to cars to boats without the hassle of ownership. Loath to buy big-ticket items such as cars and houses, millennials have sharply different spending habits from those of preceding generations. Millennials confront obstacles to prosperity that their parents didn’t face. They are better educated than previous generations—but in today’s world, that is not enough to guarantee financial success.
Mr. David Coady, Mr. Benedict J. Clements, and Mr. Sanjeev Gupta
Using cross-country analysis and case studies, this book provides new insights and potential policy responses for the key fiscal policy challenges that both advanced and emerging economies will be facing.
This technical note analyzes the health care spending issues in advanced economies. Both public and total health spending have increased substantially in advanced countries. Total health spending increased by more than 6 percentage points of GDP in the Organization for Economic Cooperation and Development countries between 1970 and 2007. This note examines the recent trends in health care spending in advanced countries. It discusses the main challenges for advanced countries over the medium term. Policy options for containing health care costs are also described.
This Selected Issues paper on the Slovak Republic reviews efficiency and reform of the health sector. The immediate challenge for the health care system in the Slovak Republic is to improve health sector outcomes while containing public health spending. The Slovak health care system is decentralized, and the central government has limited control over decisions by insurance companies and health care institutions. The government has introduced limits on administrative costs of insurance companies and submitted proposals to regulate their profits with the aim of diverting resources to health care providers.
The staff report for the Second Review Under the Stand-By Arrangement (SBA) on the Republic of Croatia highlights fiscal policy and monetary and financial sector policies. The policy implementation under this SBA has yielded sizable fiscal consolidation and advances in structural reforms, despite some snags. The authorities have taken a number of measures to discourage external borrowing, address foreign currency-related credit risk, and strengthen supervision. The health reform aims at improving the financial situation in the sector and rationalizing public spending on health.
The 2005 Article IV Consultation for the United States reports that robust productivity growth and high corporate profits have contributed to a strong rebound in business investment and some acceleration in employment. The financial sector appears well positioned to provide continued support to the recovery. Equity prices have risen, long-term interest rates remain low, banks are well capitalized and highly profitable, and indicators of credit quality remain strong. The robust housing market has caused financial regulators to tighten oversight of home equity and other residential loans.