Theme 5: Empirical work on the marginal productivity of public expenditure in health and care

An estimate of the marginal productivity of public expenditure on health and social care is important for a wide range of resource allocation decisions. It reflects the additional beneficial outcomes that could be gained with the allocation of additional resources. It also reflects the benefit forgone when resources are committed to a specific type of expenditure and, consequently, are unavailable for other types of activity. Therefore, estimates of marginal productivity allow an assessment of the opportunity costs of investing in specific projects.

One of the key aims of this theme of research is to bring together the empirical research developed so far, while filling some important empirical gaps. These include the health effects of non-marginal changes in health care expenditure and broader effects of health and social care expenditure on carers and the wider economy. This can provide important evidence to inform decisions about aggregate levels of public expenditure, its allocation between sectors as well as sector-specific decisions.