An investigation of the relationship between health care expenditures and economic growth

In the 1960s, endogenous growth theories revealed that human capital accumulation is at least as important as physical capital accumulation on economic growth. Then, it was focused on how to increase the accumulation of human capital, and it was determined that the two main components were primarily education and then health. There are many studies in the literature on the relationship between economic growth and health expenditures. In the studies on the relationship between health expenditures and economic growth, although it has been observed that health expenditures generally increase economic growth, there are also studies that do not affect economic growth or decrease economic growth. In this study, the relationship between health expenditures and economic growth has been examined for OECD countries with five different methods: panel data analysis, structural break panel data analysis, panel causality test, dynamic panel data analysis and non-linear panel data analysis. In these methods, firstly, the relationship between economic growth and health expenditures was examined. Then, the other generally accepted components of economic growth in the literature, such as capital accumulation, total factor productivity and the democracy index, whose effects on economic growth are discussed, were included in the model and the effect of health expenditures on economic growth was determined.