The Effect of Health on Economic Growth: A Production Function Approach

Year Published 2003
Business unit: Special Projects
Resource type: Case study
File type: PDF
Theme(s): Economic Development, Employment & labour markets, Health


Summary. — We estimate a production function model of aggregate economic growth including two variables that microeconomists have identified as fundamental components of human capital: work experience and health. Our main result is that good health has a positive, sizable, and statistically significant effect on aggregate output even when we control for experience of the workforce. We argue that the life expectancy effect in growth regressions appears to be a real labor productivity effect, and is not the result of life expectancy acting as a proxy for worker experience.

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