Essays on health and economic development nexus: new evidence from a panel of countries

Öztürk, Ceyhan
This empirical study investigates the effects of health on economic development that include linear, quadratic and cubic specifications for the periods 1940-1980, 1940-2009, and 1980-2009. This study tries to bring out different characteristics of the effects of health on economic growth. Hence, different periods are used depending on short and long-terms of life expectancy, body mass index, and systolic blood pressure as proxy variables for health to investigate effect of health on gross domestic product per capita. These health proxies have common characteristic of being age-dependent. Therefore, these specifications enable us to examine different dimensions of wealth-health nexus. The economic development proxy variables used are years of schooling (human capital), GDP per person engaged, manufacturing value added per person engaged (productivity), and gross domestic savings. The ordinary least squares, fixed-effects and generalized method of moments (Arellano-Bond) estimation are used for 10 yearly and balanced panel data for the 1940-1980 and 1940-2009 periods, and 5 yearly and balanced panel data for the 1980-2009 period for 47 countries. Also, for all these periods, long-difference estimation by OLS and instrumental variable estimation are utilized. Our empirical results with different health proxy variables used are generally consistent with each other. More clearly, there is a non-linear and non-monotonic association between all health proxy variables and economic development proxy variables. As a conclusion, our empirical results provide significant evidence that preserving human physiological health functions reinforces economic growth and other important indicators.