INCOME INEQUALITY, OUT-OF-POCKET HEALTH EXPENDITURE AND HEALTH OUTCOME IN SELECTED AFRICAN COUNTRIES

Abstract

The study examined the effect of income inequality and out-of-pocket (OOP) health expenditure on health outcomes, proxy by the Under-5 mortality rate, in selected economies in Africa, inclusive of South Africa, Egypt, Algeria, Nigeria and Ethiopia. The increasing financial hardship in accessing necessary medical care, due to the government's inability to fulfill its healthcare financing obligations among many African countries has raised serious concern regarding the consequential outcomes. In analyzing the effect of income inequality and Out of Pocket (OOP) heath expenditure on health outcome, using dataset obtained both from World Development Indicators (WDI) and World Income Inequality Database (WIID), we constructed ARDL-PMG model following the outcomes of unit root test. The outcomes of the analysis show that none of the independent variables has significant effect on under-five mortality rate in the short run. However, in the long run, both Gini index and OOP demonstrate positive significant effect on under-five mortality rate while Health expenditure and GDP per capita show negative significant effect. Thus, the findings suggest that the policymakers in these countries should prioritize long-term measures to reduce income inequality and promote accessible healthcare financing to improve health outcomes.