Health and economic growth: new evidence from a panel threshold model

Abstract

AbstractThe paper examines the relationship between health and economic growth using a dynamic panel with threshold effect and endogeneity. The study uses a sample of 136 countries over the period of 1965–2015 and the results indicate that the relationship between health and economic growth is nonlinear. The findings suggest that the impact of health on economic growth is only positive in countries that have attained minimum benchmarks of health improvement. These findings carry significant policy implications. Low-income countries need a comprehensive approach, encompassing multiple factors, such as education enhancement, productivity boost, and entrepreneurship promotion, that go beyond health promotion to foster substantial economic growth. In countries already attaining satisfactory health outcomes, policies prioritizing improved health outcomes, through directing investments towards Research and Development can serve as an effective means to promote sustainable economic growth.

Keywords

• Health
• economic growth
• threshold models
•  instrumental variables
• life expectancy
• I10