Effect of health on economic growth: A panel data study of developed and developing countries

Abstract

In this paper, we investigate the effect of health, such as fertility rate, total (birth per woman), life expectancy at birth, total (years) and mortality rate, under-5(per 1000 live birth), as well as capital stock on the economic growth of 16 developed countries and 14 developing countries using Panel Unit Root and Panel Data Model for the period 1990-2010. In this investigation we have found that capital stock and life expectancy have a statistically significant positive effect on economic growth in both groups of countries. Mortality rate has a statistically significant negative effect on economic growth in both groups of countries. On the other hand fertility rate has a statistically significant positive effect on economic growth in developed countries while it has a statistically significant negative effect on economic growth in developing countries. Also the study results show that the fixed effects approach is more appropriate.