Valuating the efficiency of social security and healthcare in OECD countries from a sustainable development

Abstract As the global population ages, the average health expenditures among OECD countries rose from 7.8% of GDP in 2005 to 9.9% in 2020, while social security and welfare expenditures increased from 14.5% of GDP in 1980 to 20.2% in 2016. However, social security and healthcare are related to SDG1, SDG3, and SDG10. Looking over the data envelopment analysis (DEA) literature, it is rare to distinguish functional differences when evaluating social security efficiency, which is mostly mixed between social insurance and healthcare, and the impact of social security on healthcare efficiency has not yet been any major focus. This research uses the two-stage recycle dynamic undesirable SBM DEA model to observe the efficiency of social security and healthcare in OECD countries. Thereare three findings as follows. First, we find that the higher is social security efficiency, the better is healthcare efficiency of countries with GDP per capita below US$41,500. Second, the higher is social security efficiency of National Health Service (NHS) countries, the better is healthcare efficiency. When the financial source of the social security system is taxation, then it is more likely to bring higher efficiency to healthcare.