Health expenditure and income inequality: evidence from sub-Saharan Africa

Purpose This study examined the effect of health expenditure on income inequality in sub-Saharan Africa (SSA) using data for 30 SSA countries covering the period 2007 to 2022. Design/methodology/approach The study employed the fixed effect estimator with Driscoll and Kraay standard errors. A sensitivity analysis was conducted involving an estimation for the aggregate sample and a sub-sample of low-income and middle income countries. Three measures of health expenditure such as out of pocket health expenditure, private health expenditure and public health expenditure were considered. Findings The results showed that out of pocket expenditure and private health expenditure significantly increased income inequality while public health expenditure had a significant reduction effect. The results are consistent for both the aggregate sample and the sub-sample of middle-income countries. It was also similar to the results for the case of low-income countries except for the effect of out of pocket expenditure which was not significant. Originality/value This study considered three measures of health expenditure in order to determine their differential effect. This study accounted for possible heterogeneity by considering the sensitivity of the samples used. It therefore established the case for low- and middle-income countries separately.