The Impact of Public Health Expenditure on Economic Development – Evidence from Prefecture-Level Panel Data of Shandong Province

Abstract

Public health expenditure is an indispensable part of social economy. The public has always paid close attention to public health expenditure. In order to study the quantitative relation between public health expenditure and social economic development, this paper investigates prefecture-level cities in Shandong Province, due to the unique characteristics of Shandong Province. Making theoretical and empirical contributions, this paper augments the Cobb-Douglas production function with public health expenditure and empirically analyzes economic development of prefecture-level cities in Shandong Province. A panel data set is established, followed by multivariate regression analysis. Empirical results find that public health expenditure per capita and coverage of medical insurance can significantly promote social economic development. However, the expansion and growth of the number of health institutions does not necessarily promote economic development. Instead, it may even hold back economic development by causing personnel redundancy and waste of resources. If the government transfers its investment focus from the scale and the speed of development of medical services to their fairness and efficiency, public health expenditure may vastly improve both public health and economic development.

Does Public Health Influence Economic Performance? Investigating the Role of Governance and Greener Energies for the Case of China

“…Enhancing the public health expenses increases economic development. The research findings showed consistent results with ( 19 , 20 , 50 ). At the same time, there is a negative but statistical association between renewable energy and the economy's Gross domestic product.…”

“…The findings of the research were consistent with ( 19 , 47 , 50 , 51 ). First increasing the expenditure on public health will help in boosting the performance of the economy.…”

“…To conclude all, public health is a topic of concern for past years. Health reforms in various cities of China have made the country powerful in economic development ( 50 ). This article argues whether there is the influence of public health on economic performance and the government plays part in achieving economic development.…”