Between 1970 and 1986, all Canadian provinces introduced some version of a prescription drug subsidy for those aged 65 years or over and since 1986, all the provinces have increased copayments or deductibles to some degree. Employing a first-order approximation to the welfare gains from a subsidy, we find evidence that these subsidies have been less redistributive than an absolute per household cash transfer but slightly more redistributive than a transfer that would increase each household’s income by the same percentage. Such evidence may have relevance for predicting the redistributive effects of a potential national prescription drug plan for seniors in the US.
Authors
Research Fellow University of Michigan
Tom is a Research Fellow at IFS, a Research Professor for the Institute for Social Research at the University of Michigan.
Sule Alan
Paul Grootendorst
Michael R Veall
Journal article details
- DOI
- 10.1016/S0167-6296(02)00012-7
- Publisher
- Elsevier
- JEL
- I18, J42
- Issue
- Volume 21, Issue 5, September 2002
Suggested citation
Alan, S et al. (2002). 'The effects of drug subsidies on out-of-pocket prescription drug expenditures by seniors: regional evidence from Canada' 21(5/2002)
More from IFS
Understand this issue
Council funding is a numbers game in which everybody is losing
13 May 2024
Empty defence spending promises are a shot in the dark
29 April 2024
Public investment: what you need to know
25 April 2024
Policy analysis
The past and future of UK health spending
14 May 2024
NHS spending has risen less quickly than was planned at the last election, despite the pandemic and record waiting lists
14 May 2024
4.2 million working-age people now claiming health-related benefits, could rise by 30% by the end of the decade
19 April 2024
Academic research
The employment and distributional impacts of nationwide minimum wage changes
10 April 2024
Unfunded mandates and taxation
14 March 2024
Willingness to pay for improved public education and public healthcare systems: the role of income mobility prospects
14 March 2024