The Relationship of Health Expenditures and Economic Growth: An Analysis on Turkish Economy (1988-2019)

Abstract

Health and education expenditures are named the sources of human capital accumulation. It is claimed that health and education expenditures make a positive contribution to the economic growth process through human capital accumulation. The development of health expenditures in Turkey in the period 1988-2019 and its impact on economic growth is emphasized in this study. In this context, the effects of the health expenditures (HE) and the life expectancy at birth (LEB) on economic growth (GDP) were analyzed with the ARDL co-integration test. As a result, there was a co-integration relationship among the variables in the long run. In the study, a positive relationship was determined between HE, LEB and GDP in 1998-2019 period in Turkey. In this framework indicated that oneunit increase of HE leads to an increase of 0.112 units in GDP and one-unit increase in the LEB caused a rise of 0.018 units in GDP. When the effects of HE and LEB variables on economic growth are compared, it is concluded that the HE effect is greater in Turkey. Also, within the framework of Toda-Yamamoto causality analysis, it was found that there was bidirectional causality relationship between HE and economic growth.