LAUSR

The Brazilian government shares the responsibility of financing public health among federal, state, and municipal levels. Health expenditures are thus uneven across the country and cannot contribute equally to health outcomes across disease categories. This study aims to identify how the health expenditures of municipalities affect the mortality rate in the state of Paraná by causa mortis. We considered years of life lost for each municipality, the chapters of the International Classification of Diseases (10th revision), and the elasticity of this measure in relation to public health expenditure. Considering the possibility of endogeneity, this study follows the instrumental variable approach in a panel of generalized method of moments - instrumental variable (GMM-IV) with fixed effects. Our results show that a 1% increase in health expenditure could decrease the average number of years lost specifically for some causes from 0.176% to 1.56% at the municipal level. These findings could elucidate policy perspective within state finance.