Beyond the Aging Burden: A Stage-based Analysis of Population Aging and Health Expenditures in OECD Countries

Background Population aging is often seen as a key driver of rising health spending. However, most studies treat older individuals as a homogeneous group, overlooking the differences in aging stages within populations. To create sustainable health financing policies, it’s essential to analyze how aging impacts health expenditure at different stages. This study examines the influence of the population aged 65–79 and those 80 and over on health expenditure as a percentage of GDP in OECD countries. Methods This research uses an unbalanced panel dataset of 38 OECD nations from 2000 to 2024. A multivariate random-effects panel regression assesses the relationship between aging indices and health expenditures, controlling for health system capacity, disease burden, and economic factors. Stationarity tests and data transformations enhance the robustness of the findings. Results The findings reveal that the relationship between aging and health expenditure varies across different stages. Increases in the 65–79 age group correlate with a significant decrease in health expenditure shares, while the 80 + group shows no independent effect. Economic factors, especially GDP per capita, physician density, and medical technology availability, are crucial determinants, whereas disease burden indicators provide limited explanatory power. Notably, comparisons among countries highlight significant heterogeneity. Conclusion These results challenge the notion that population aging automatically leads to increased health expenditures. Instead, spending patterns are primarily influenced by macroeconomic conditions, health system capacity, and technological advancements, indicating the need for tailored policies that address specific societal contexts. JEL codes I10, I18, J11, C23