Redistributive Effect of the Household Health Expenditure in Bulgaria

Purpose and objectives. The purpose of the study is to assess and analyze the effect of household health expenditure on income inequality. The objective is expressed with the implementation of graphical and analytical instruments for the determination and explanation of the influence of household health expenditure on income distribution. Data and methods. The data is collected from the annual statistical books 'Household Budgets in the Republic of Bulgaria' issued by the National Statistical Institute of Bulgaria. The observed variables are 'household health expenditure by decile groups of income - the average per capita' and 'total gross household income - the average per capita'. The data cover the period from 2000 to 2021. The study uses the methods like Lorenz and concentration curves of income and costs, Kakwani index (K), Gini index (G) and coefficient of redistributive effect (RE). Results. The RE has got an increasing power with negative values for each year (RE2000 = -0.001; RE2019 = -0.007; RE2021 = -0.024). The Kakwani indices are negative and with growing absolute values (K2000 = -0,035; K2019 = -0,11; K2021 = -0,179). These results indicate a relatively growing burden of health costs on poorer households. The process of concentration of the expenses to the lower incomes group is particularly well expressed during the pandemic years 2020 and 2021. Conclusions. The main conclusion is that the redistributive effect of a household's health expenditure has got an increasing power in the condition of regressivity impact on the income distribution.