POPULATION AGING, ECONOMIC GROWTH, AND HEALTH FINANCING SUSTAINABILITY: EVIDENCE FROM ASEAN-5 COUNTRIES

Abstract

This study examines the impact of population aging, economic growth, and investment on public health expenditure within the framework of health financing sustainability in ASEAN-5 countries (Indonesia, Malaysia, Thailand, the Philippines, and Singapore). Using a quantitative approach with panel data from 2009–2023, the analysis employs the Fixed Effects Model (FEM) to control for unobserved heterogeneity across countries. Population aging is proxied by the old-age dependency ratio, economic growth by GDP per capita growth, investment by gross capital formation, and public health expenditure by domestic general government health expenditure. The empirical findings indicate that population aging exerts a positive and statistically significant effect on public health expenditure, underscoring the role of demographic transition as a key driver of increasing healthcare costs in the region. In contrast, economic growth and investment are found to be statistically insignificant, suggesting that macroeconomic expansion and capital accumulation do not automatically translate into higher public health spending. These results emphasize the predominance of demographic pressures over macroeconomic factors in shaping health financing dynamics in developing economies. This study contributes to the existing literature by providing robust empirical evidence from ASEAN-5 and offers policy-relevant insights for the design of sustainable and demographically responsive health financing systems.