Do Health Spending and Economic Growth Matter in Development? Evidence from Turkey
Year 2022,
Volume: 7 Issue: Özel Sayı, 19 - 32, 24.10.2022
Ebru Z. Boyacıoğlu
,
Mehmet Kenan Terzioğlu
Abstract
Development is a multi-dimensional process that involves changes in social and economic structure. The study deals with the relationship between health spending (HS), economic growth per capita (RGDP), and development level (HDI). A country's healthcare situation is the key component of the development level. The study explores the interdependence in Turkey and aims to combine economic level and health aspects of development. Based on this idea, the relation between the variables is analyzed by using Johansen co-integration and causality tests. The data set covers the period from 1990-2019. The empirical findings of the study confirm a significant relationship between development level, health spending, and economic growth both in short term and long term in Turkey. The causality results showed only one-way causality was obtained, from HS to HDI and from GDP to HDI. Findings show that an increase in health spending and income level in Turkey affects development positively in the long run. A planned increase in health expenditures for sustainable development is presented as a future direction.
References
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- Becker, G.S. (1993). Human capital (3rd ed.). Chicago: University of Chicago Press.
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- Elmi, Z.M. and Sadeghi, S. (2012). Health care expenditures and economic growth in developing countries: Panel co-integration and causality. Middle East Journal of Scientific Research, 12(1), 88–91. doi:10.5829/idosi.mejsr.2012.12.1.64196
- Ercelik, G. (2018). The relationship between health expenditure and GDP per capita in Turkey from 1980 to 2015. Journal of Politics, Economy and Management, 1(1), 1–8. https://dergipark.org.tr/en/pub/jopem
- Ezzati, M., Vander Hoorn, S., Lawes, C.M.M., Leach, R., James, W.P.T., Lopez, A.D., ... and Murray, C. J.L. (2005). Rethinking the “diseases of affluence” paradigm: Global patterns of nutritional risks in relation to economic development. PLoS Medicine, 2(5), e133. https://doi.org/10.1371/journal.pmed.0020133
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- Grossman, M. (1972). On the concept of health capital and the demand for health. Journal of Political Economy, 80(2), 223–255. Retrieved from https://www.jstor.org/
- Institute of Medicine. (2003). Hidden costs, lost values. Washington, DC: National Academies Press.
- Jaunky, A. and Khadaroo, V. (2008). Health care expenditure and GDP: An African perspective. Applied Econometrics and International Development, 8(1), 130-146. Retrieved from https://www.usc.gal/
- Johansen, S. (1988). Statistical analysis of co-integration vectors. Journal of Economic Dynamics and Control, 12(2-3), 231-254. doi:10.1016/0165-1889(88)90041-3
- Kalemli-Ozcan, S., Ryder, H.E. and Weil, D.N. (2000). Mortality decline, human capital investment, and economic growth. Journal of Development Economics, 62(1), 1-23. https://doi.org/10.1016/S0304-3878(00)00073-0
- Kiymaz, H., Akbulut, Y. and Demir, A. (2006). Tests of stationarity and cointegration of health care expenditure and gross domestic product. European Journal of Health Economics, 7(4), 285–289. https://doi.org/10.1007/s10198-006-0375-9
- Klomp, J. and De Haan, J. (2008). Effects of governance on health: A cross‐national analysis of 101 countries. Kyklos, 61(4), 599-614. https://doi.org/10.1111/j.1467-6435.2008.00415.x
- Lewis, M. and Jack, W. (2009). Health investments and economic growth: Macroeconomic evidence and microeconomic foundations (Policy Research Working Paper No. 2009). https://doi.org/10.1596/1813-9450-4877
- Mehrara, M. and Musai, M. (2011). Granger causality between health and economic growth in oil exporting countries. Interdisciplinary Journal of Research in Business, 1(8), 103-108. Retrieved from https://journaldatabase.info/
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- Mushkin, S.J. (1962). Health as an Investment. Journal of Political Economy, 70(5/2), 129-157. http://dx.doi.org/10.1086/258730
- Pesaran, M.H., Shin, Y. and Smith, R.J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326. doi:10.1002/jae.616
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- Tirasoglu, M. and Yildirim, B. (2012). Health expenditure and economic growth relationship in the case of structural break: A case study for Turkey. Electronic Journal of Vocational Colleges, 2(2), 111-117. https://doi.org/10.1501/OTAM_0000000515
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Sağlık Harcamaları ve Ekonomik Büyüme Kalkınma Sürecinde Etkili mi: Türkiye Örneği
Year 2022,
Volume: 7 Issue: Özel Sayı, 19 - 32, 24.10.2022
Ebru Z. Boyacıoğlu
,
Mehmet Kenan Terzioğlu
Abstract
Kalkınma, sosyal ve ekonomik yapıdaki değişiklikleri içeren çok boyutlu bir süreçtir. Çalışma, Türkiye'de sağlık harcamaları (HS), kişi başı ekonomik büyüme (KBGSYH) ve gelişmişlik düzeyi (HDI) arasındaki ilişkiyi ele almaktadır. Bir ülkenin sağlık durumu, kalkınma düzeyinin temel bileşeni ile ilgilidir. Bu çalışma, Türkiye'deki karşılıklı bağımlılığı araştırmakta ve kalkınmanın gelir düzeyi ile sağlık yönünü birleştirmeyi amaçlamaktadır. Bu fikirden hareketle, değişkenler arasındaki ilişki Johansen eşbütünleşme ve nedensellik testleri kullanılarak analiz edilmiştir. Veri seti 1990-2019 dönemini kapsamaktadır. Çalışmanın ampirik bulguları, Türkiye'de hem kısa hem de uzun vadede gelişmişlik düzeyi, sağlık harcamaları ve ekonomik büyüme arasında anlamlı bir ilişki olduğunu doğrulamaktadır. Nedensellik sonuçları, HS'den HDI'ye ve KBGSYH'den HDI’ye yalnızca tek yönlü nedensellik elde edildiğini göstermektedir. Bulgulara göre Türkiye'de sağlık harcamaları ve gelir düzeyindeki artış uzun vadede kalkınmayı olumlu yönde etkilemektedir. Sürdürülebilir bir kalkınma için sağlık harcamalarında planlı artışların devam ettirilmesi çalışma önerisi olarak sunulmaktadır.
References
- Acemoglu, D. and Johnson, S. (2006). Disease and development: The effect of life expectancy on economic growth (NBER Working Paper Series No. 12269). Retrieved from https://www.nber.org/system/files/working_papers/w12269/w12269.pdf
- Ak, R. (2012). The relationship between health expenditures and economic growth: Turkish case. International Journal of Business Management & Economic Research, 3(1), 404-409. Retrieved from http://www.ijbmer.com/
- Akar, S. (2014). An investigation of the relationship among health expenditures, relative price of health expenditures and economic growth in Turkey. Journal of Management and Economy, 21(1), 311-322. https://doi.org/10.23834/isrjournal.393567
- Akdag, R. (2009). Health transformation program in Turkey (Progress Report). Retrieved from https://ekutuphane.saglik.gov.tr/Ekutuphane/kitaplar/TurkeySPDEng.pdf
- Alhassan, G.N. Adedoyin, F.F. Bekun, F.V. and Agabo, T.J. (2021). Life expectancy, death rate and public health expenditure matter in sustaining economic growth under COVID-19: Empirical evidence from Nigeria? Journal of Public Affairs, 21(4), e2302. https://doi.org/10.1002/pa.2302
- Atilgan, E., Kilic, D. and Ertugrul, H.M. (2017). The dynamic relationship between health expenditure and economic growth: Is the health-led growth hypothesis valid for Turkey? The European Journal of Health Economics, 18, 567–574. doi:10.1007/s10198-016-0810-5
- Baltagi, B.H. and F. Moscone, (2010). Health care expenditure and income in the OECD reconsidered: Evidence from panel data. Economic Modelling, 27, 804-811. https://doi.org/10.1016/j.econmod.2009.12.001
- Barro, R. (1991). Economic growth in a cross-section of counties. Quarterly Journal of Economics, 106(2), 407-433. https://doi.org/10.2307/2937943
- Becker, G.S. (1962). Investment in human capital: A theoretical analysis. Journal of Political Economy, 70(5), 9-20. http://dx.doi.org/10.1086/258724
- Becker, G.S. (1993). Human capital (3rd ed.). Chicago: University of Chicago Press.
- Bhat, R, and Jain, N. (2004). Analysis of public expenditure on health using state level data (IIMA Institutional Repository Working Papers No. 1827). Retrieved from http://vslir.iima.ac.in:8080/jspui/handle/11718/5947
- Blackburn, K. and Cipriani, G.P. (2002). A model of longevity, fertility and growth. Journal of Economic Dynamics and Control, 26(2), 187-204. https://doi.org/10.1016/S0165-1889(00)00022-1
- Bloom, D.E. and Canning, D. (2000). The health and wealth of nations. Science, 287, 1207–1209, doi:10.1126/science.287.5456. 1207
- Bloom, D. and Canning, D. (2005). Health and economic growth: Micro and macro evidence (CDDRL Working Papers No. 42). http://www.nber.org/papers/w42.pdf
- Bloom, D.E., Canning, D. and Jamison, D.T. (2004). Health, wealth and welfare. Finance and Development, 41, 10-15. Retrieved from https://www.elibrary.imf.org/
- Bouatyeb, A. and Serghini, M. (2006). Health indicators and human development in the Arab region. International Journal of Health Geographics, 5(1), 61. doi:10.1186/1476-072X-5-61
- Boyacioglu, E.Z. (2012). The importance of health expenditures on sustainable development. International Journal of Social Sciences and Humanity Studies, 4(2), 147-158. Retrieved from https://dergipark.org.tr/en/pub/ijsshs/
- Bukenya, J. (2009). Do fluctuations in health expenditure affect economic growth? The Open Economics Journal, 2, 31-38. https://doi.org/10.2174/1874919400902010031
- Burton, W.N., Pransky, G., Conti, D.J., Chan, C-Y. and Edington, D.W. (2004). The association of medical conditions and presenteeism. Journal of Occupational and Environmental Medicine, 46, 38-45. doi:10.1097/01.jom.0000126687.49652.44
- Commission on Macroeconomics and Health. (2001). Macroeconomics and health: Investing in health for economic development. Geneva: World Health Organization.
- Cracolici M.F., Cuffaro, M. and Nijkamp, P. (2010). The measurement of economic, social and environmental performance of countries: A novel approach. Social Indicators Research, 95(2), 339–356. https://doi.org/10.1007/s11205-009-9464-3
- DeVol, R. and Bedroussian, A. (2007). An unhealthy America: The economic burden of chronic disease. Santa Monica, CA: The Milkin Institute.
- Dieleman, J.L., Haakenstad, A., Micah, A., Moses, M. and Murray, C.J. (2018). Spending on health and HIV/AIDS: Domestic health spending and development assistance in 188 countries, 1995–2015. The Lancet, 391(10132), 1799-1829. https://doi.org/10.1016/S0140-6736(18)30698-6
- Dikmetas Yardan, E., Demirkıran, M. and Yabana Kiremit, B. (2016). Turkey’s health expenditure trends. Hitit University Journal of Social Sciences Institute, 9(1), 157-176. http://dx.doi.org/10.17218/husbed.12216
- Elmi, Z.M. and Sadeghi, S. (2012). Health care expenditures and economic growth in developing countries: Panel co-integration and causality. Middle East Journal of Scientific Research, 12(1), 88–91. doi:10.5829/idosi.mejsr.2012.12.1.64196
- Ercelik, G. (2018). The relationship between health expenditure and GDP per capita in Turkey from 1980 to 2015. Journal of Politics, Economy and Management, 1(1), 1–8. https://dergipark.org.tr/en/pub/jopem
- Ezzati, M., Vander Hoorn, S., Lawes, C.M.M., Leach, R., James, W.P.T., Lopez, A.D., ... and Murray, C. J.L. (2005). Rethinking the “diseases of affluence” paradigm: Global patterns of nutritional risks in relation to economic development. PLoS Medicine, 2(5), e133. https://doi.org/10.1371/journal.pmed.0020133
- Finlay, J. (2007). The role of health in economic development (PGDA Working Paper Series No. 21). Retrieved from https://cdn1.sph.harvard.edu/wp-content/uploads/sites/1288/2013/10/PGDA_WP_21.pdf
- Grossman, M. (1972). On the concept of health capital and the demand for health. Journal of Political Economy, 80(2), 223–255. Retrieved from https://www.jstor.org/
- Institute of Medicine. (2003). Hidden costs, lost values. Washington, DC: National Academies Press.
- Jaunky, A. and Khadaroo, V. (2008). Health care expenditure and GDP: An African perspective. Applied Econometrics and International Development, 8(1), 130-146. Retrieved from https://www.usc.gal/
- Johansen, S. (1988). Statistical analysis of co-integration vectors. Journal of Economic Dynamics and Control, 12(2-3), 231-254. doi:10.1016/0165-1889(88)90041-3
- Kalemli-Ozcan, S., Ryder, H.E. and Weil, D.N. (2000). Mortality decline, human capital investment, and economic growth. Journal of Development Economics, 62(1), 1-23. https://doi.org/10.1016/S0304-3878(00)00073-0
- Kiymaz, H., Akbulut, Y. and Demir, A. (2006). Tests of stationarity and cointegration of health care expenditure and gross domestic product. European Journal of Health Economics, 7(4), 285–289. https://doi.org/10.1007/s10198-006-0375-9
- Klomp, J. and De Haan, J. (2008). Effects of governance on health: A cross‐national analysis of 101 countries. Kyklos, 61(4), 599-614. https://doi.org/10.1111/j.1467-6435.2008.00415.x
- Lewis, M. and Jack, W. (2009). Health investments and economic growth: Macroeconomic evidence and microeconomic foundations (Policy Research Working Paper No. 2009). https://doi.org/10.1596/1813-9450-4877
- Mehrara, M. and Musai, M. (2011). Granger causality between health and economic growth in oil exporting countries. Interdisciplinary Journal of Research in Business, 1(8), 103-108. Retrieved from https://journaldatabase.info/
- Mirvis, D.M., Chang, C.F. and Cosby, A. (2008). Health as an economic engine: Evidence for the importance of health in economic development. Journal of Health and Human Services Administration, 31(1), 30–57. Retrieved from https://www.jstor.org/
- Mushkin, S.J. (1962). Health as an Investment. Journal of Political Economy, 70(5/2), 129-157. http://dx.doi.org/10.1086/258730
- Pesaran, M.H., Shin, Y. and Smith, R.J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326. doi:10.1002/jae.616
- Schultz, T.P. (1999). Health and schooling investments in Africa. Journal of Economic Perspective, 13(3), 67–88 doi:10.1257/jep.13.3.67
- Sulku, S.N. and Caner, A. (2011). Health care expenditures and gross domestic product: The Turkish case. The European Journal of Health Economics, 12(1), 29–38. doi:10.1007/s10198-010-0221-y
- Tirasoglu, M. and Yildirim, B. (2012). Health expenditure and economic growth relationship in the case of structural break: A case study for Turkey. Electronic Journal of Vocational Colleges, 2(2), 111-117. https://doi.org/10.1501/OTAM_0000000515
- UNDP. (1990). Human development report 1990: Concept and measurement of human development. Retrieved from http://www.hdr.undp.org/en/reports/global/hdr1990
- Wang, K.M. (2011). Health care expenditure and economic growth: Quantile panel-type analysis. Economic Modelling, 28(4), 1536–1549. https://doi.org/10.1016/j.econmod.2011.02.008
- World Bank. (2001). World development indicators. Washington: World Bank.
- World Bank. (2008). OECD: Reviews of health Systems: Turkey. Retrieved from https://documents1.worldbank.org/curated/en/163291468174239361/pdf/754330WP0Box370Health0SystemsTurkey.pdf
- World Bank. (2022). World health organization global health expenditure database. Retrieved from https://data.worldbank.org/indicator/SH.XPD.CHEX.PC.CD
- World Health Organization. (2001). Macroeconomics and health: Investing in health for economic development. Retrieved from www.emro.who.int/cbi/pdf/CMHReportHQ.pdf
- World Health Organization. (2002). Reducing risk: Promoting health life. Retrieved from http://www.who.int/whr/2002/en
- World Health Organization. (2004). Changing history. 2004 annual report. Retrieved from http://www.who.int/whr/2004/en