Health Expenditure, education and Economic Growth in MENA Countries

Lacheheb, Miloud and Med Nor, Norashidah and Baloch, Imdadullah (2014): Health Expenditure, education and Economic Growth in MENA Countries.

Abstract

This study examines the relationship between health expenditure, education and economic growth in MENA countries using panel data estimation. Our results based on random effect estimation endorse a relationship between health expenditure, education and economic growth. Data were obtained from the World Bank Development Indicators for the period of 1995 to 2010 for 20 countries from Middle East and North Africa region. Importantly, our results reveal that health expenditure and education have significantly positive effect on economic growth. Also gross fixed capital formation positively, but insignificantly, related to economic growth of MENA countries. Therefore, investment in human capital, namely health and education, will increase income in these countries.

• Item Type: MPRA Paper
• Language: English
• Keywords: Economic growth; Education; Health expenditure; MENA countries
• Subjects: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E61 - Policy Objectives ; Policy Designs and Consistency ; Policy Coordination; I - Health, Education, and Welfare > I1 - Health; I - Health, Education, and Welfare > I1 - Health > I15 - Health and Economic Development; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I25 - Education and Economic Development

References

References Akala, F. A., & El-Saharty, S. (2006). Public-health challenges in the middle east and north africa. The Lancet, 367(9515), 961-964. doi:http://dx.doi.org/10.1016/S0140-6736(06)68402-X

Barro, R. J. (1991). ECONOMIC GROWTH IN A CROSS SECTION OF COUNTRIES. The Quarterly Journal of Economics, 106(2), 407-443.

Barro, R. J. (2001). Human capital and growth. American Economic Review, , 12-17.

Barro, R. J. (2003). Determinants of economic growth in a panel of countries. Annals of Economics and Finance, 4, 231-274.

Barro, R. J., & Lee, J. (2001). International data on educational attainment: Updates and implications. Oxford Economic Papers, 53(3), 541-563.

Breusch, T. S., & Pagan, A. R. (1980). The lagrange multiplier test and its applications to model specification in econometrics. The Review of Economic Studies, , 239-253.

Caselli, F., Esquivel, G., & Lefort, F. (1996). Reopening the convergence debate: A new look at cross-country growth empirics. Journal of Economic Growth, 1(3), 363-389.

Finkelstein, A. (2007). The aggregate effects of health insurance: Evidence from the introduction of medicare. The Quarterly Journal of Economics, 122(1), 1-37.

Gerdtham, U., & Jönsson, B. (2000). International comparisons of health expenditure: Theory, data and econometric analysis. Handbook of Health Economics, 1, 11-53.

Gerdtham, U., Søgaard, J., Andersson, F., & Jönsson, B. (1992). An econometric analysis of health care expenditure: A cross-section study of the OECD countries. Journal of Health Economics, 11(1), 63-84.

Gyimah-Brempong, K., & Wilson, M. (2004). Health human capital and economic growth in sub-saharan african and OECD countries. The Quarterly Review of Economics and Finance, 44(2), 296-320.

Hanushek, E. A., & Kim, D. (1995). Schooling, labor force quality, and economic growth. NBER Working Paper, (w5399)

Hausman, J. A., & Taylor, W. E. (1981). Panel data and unobservable individual effects. Econometrica: Journal of the Econometric Society, , 1377-1398.

Kleiman, E. (1974). The determinants of national outlay on health. The Economics of Health and Medical Care, Macmillan, London, , 369-376.

Knowles, S., & Owen, P. D. (1995). Health capital and cross-country variation in income per capita in the mankiw-romer-weil model. Economics Letters, 48(1), 99-106.

Li, H., & Huang, L. (2009). Health, education, and economic growth in china: Empirical findings and implications. China Economic Review, 20(3), 374-387.

Limam, I., Samir, M., & Zeki, F. (2006). Determinants of growth in the MENA countries. Contributions to Economic Analysis, 278, 32-60.

Mankiw, N. G., Romer, D., & Weil, D. N. (1992). A contribution to the empirics of economic growth. The Quarterly Journal of Economics, 107(2), 407-437.

Mayer, D., Mora, H., Cermeño, R., Barona, A. B., & Duryeau, S. (2001). Health, growth and income distribution in latin america and the caribbean: A study of determinants and regional local behavior. Investment in Health: Social and Economic Returns, 582(4), 3-32.

Moon, R. (2003). From Charity to Human Right: Discourse and Global Expansion of Health and Health Education, 1650-1997,

Morand, O. F. (2005). Economic growth, health, and longevity in the very long term: Facts and mechanisms. Health and Economic Growth: Findings and Policy Implications, 74(2)

Mushkin, S. J. (1962). Health as an investment. The Journal of Political Economy, 70(5), 129-157.

Newhouse, J. P. (1977). Medical-care expenditure: A cross-national survey. The Journal of Human Resources, 12(1), 115-125.

Newhouse, J. P. (1992). Medical care costs: How much welfare loss? The Journal of Economic Perspectives, 6(3), 3-21.

Parkin, D., McGuire, A., & Yule, B. (1987). Aggregate health care expenditures and national income: Is health care a luxury good? Journal of Health Economics, 6(2), 109-127.

Romer, P. M. (1986). Increasing returns and long-run growth. The Journal of Political Economy, , 1002-1037.

Rosen, G. (1993). A history of public health JHU Press. Schultz, T. W. (1961). Investment in human capital. The American Economic Review, 51(1), 1-17.

Van Zon, A., & Muysken, J. (2003). Health as a principal determinant of economic growth MERIT, Maastricht Economic Research Institute on Innovation and Technology.

Wang, K. (2011). Health care expenditure and economic growth: Quantile panel-type analysis. Economic Modelling, 28(4), 1536-1549.

Wooldridge, J. M. (2003). Cluster-sample methods in applied econometrics. American Economic Review, , 133-138.

World Bank. (2013). The world bank data. Retrieved 11/10, 2013, Retrieved from data.worldbank.org