The impact of health on GDP: A panel data investigation

Abstract

Using a balanced panel of 19 industrial economies and a long time series ranging from 1950 to 2013, we investigate the short-run and long-run relationship between health, proxied by life expectancy, and income using panel cointegrating analysis and panel Granger causality. We find that total life expectancy, male life expectancy, and female life expectancy have all a positive and statistically significant short-run and the long-run effect on both total and per capita income. As a consequence, we conclude that health should be considered an important ingredient of the economic performance of an economy. We examine the robustness of our results using data from Scandinavian and non-Scandinavian countries.