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The Effect of Health on Economic Growth: Theory and Evidence

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Author Info
David E. Bloom
David Canning
Jaypee Sevilla

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Abstract

Macroeconomists acknowledge the contribution of human capital to economic growth, but their empirical studies define human capital solely in terms of schooling. In this paper, we extend production function models of economic growth to account for two additional variables that microeconomists have identified as fundamental components of human capital: work experience and health. Our main result is that good health has a positive, sizable, and statistically significant effect on aggregate output. We find little variation across countries in average work experience, thus differentials in work experience account for little variation in rates of economic growth. Finally, we find that the effects of average schooling on national output are consistent with microeconomic estimates of the effects of individual schooling on earnings, suggesting that education creates no discernible externalities.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8587.

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Date of creation: Nov 2001
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Handle: RePEc:nbr:nberwo:8587

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. John Strauss & Duncan Thomas, 1998. "Health, Nutrition, and Economic Development," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 766-817, June. [Downloadable!] (restricted)
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  2. David E. Bloom & David Canning, 2004. "The Health and Wealth of Africa," World Economics, World Economics, Economic & Financial Publishing, PO Box 69, Henley-on-Thames, Oxfordshire, United Kingdom, RG9 1GB, vol. 5(2), pages 57-81, April. [Downloadable!]
  3. Carneiro, Pedro & Heckman, James J., 2003. "Human Capital Policy," IZA Discussion Papers 821, Institute for the Study of Labor (IZA). [Downloadable!]
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  4. Peter Klenow & Andrés Rodríguez-Clare, 1997. "The Neoclassical Revival in Growth Economics: Has It Gone Too Far?," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 73-114 National Bureau of Economic Research, Inc. [Downloadable!]
  5. Mark Bils & Peter J. Klenow, 2000. "Does Schooling Cause Growth?," American Economic Review, American Economic Association, vol. 90(5), pages 1160-1183, December. [Downloadable!] (restricted)
  6. John Luke Gallup & Jeffrey D. Sachs & Andrew Mellinger, 1999. "Geography and Economic Development," CID Working Papers 1, Center for International Development at Harvard University. [Downloadable!]
  7. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment Updates and Implications," NBER Working Papers 7911, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Young, Alwyn, 1994. "Lessons from the East Asian NICS: A contrarian view," European Economic Review, Elsevier, vol. 38(3-4), pages 964-973, April. [Downloadable!] (restricted)
  9. David E. Bloom & Jeffrey D. Sachs, 1998. "Geography, Demography, and Economic Growth in Africa," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1998-2), pages 207-296. [Downloadable!]
  10. Gallup, J.L. & Sachs, J.D. & Mullinger, A., 1999. "Geography and Economic Development," Papers 1, Chicago - Graduate School of Business.
  11. Pritchett, Lant & Summers, Lawrence H., 1993. "Wealthier is healthier," Policy Research Working Paper Series 1150, The World Bank. [Downloadable!]
  12. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May. [Downloadable!] (restricted)
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  1. Heinz Handler & Andreas Knabe & Bertrand Koebel & Margit Schratzenstaller & Sven Wehke, 2005. "The Impact of Public Budgets on Overall Productivity Growth," WIFO Working Papers 255, WIFO. [Downloadable!]
  2. Jong-Wha Lee & Warwick J. McKibbin, 2003. "Globalization and Disease: The Case of SARS," Departmental Working Papers 2003-16, Australian National University, Economics RSPAS. [Downloadable!]
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  3. David Epstein & Dolores Jiménez-Rubio & Peter C. Smith & Marc Suhrcke, 2009. "Social determinants of health: an economic perspective," Health Economics, John Wiley & Sons, Ltd., vol. 18(5), pages 495-502. [Downloadable!]
  4. Garima Malik, 2006. "An Examination of the relationship between Health and Economic Growth," Indian Council for Research on International Economic Relations, New Delhi Working Papers 185, Indian Council for Research on International Economic Relations, New Delhi, India. [Downloadable!]
  5. Clive Bell & Hans Gersbach, 2006. "Growth and Enduring Epidemic Diseases," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  6. Sergio Beraldo & Daniel Montolio Estivill & Gilberto Turati, 2005. "Healthy, Educated and Wealthy: Is the Welfare State Really Harmful for Growth?," Working Papers in Economics 127, Universitat de Barcelona. Espai de Recerca en Economia. [Downloadable!]
  7. Jochen Hartwig, 2008. "Has health capital formation cured ‘Baumol’s Disease’? – Panel Granger causality evidence for OECD countries," KOF Working papers 08-206, KOF Swiss Economic Institute, ETH Zurich. [Downloadable!]
  8. Oded Galor & David Mayer-Foulkes, 2004. "Food for Thought: Basic Needs and Persistent Educational Inequality," GE, Growth, Math methods 0410002, EconWPA. [Downloadable!]
  9. John, Peabody & Tauiwalo, Mario & Robalino, David & Frenk, Julio, 2004. "Improving the Quality of Care in Developing Countries," MPRA Paper 12252, University Library of Munich, Germany. [Downloadable!]
  10. Millimet, Daniel & Wang, Le, 2005. "Is the Quantity-Quality Trade-off Really a Trade-off for All?," Departmental Working Papers 0502, Southern Methodist University, Department of Economics. [Downloadable!]
  11. Karen Eggleston & Keqin Rao & Jian Wang, 2005. "From Plan to Market in the Health Sector? China's Experience," Discussion Papers Series, Department of Economics, Tufts University 0501, Department of Economics, Tufts University. [Downloadable!]
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  12. Anni Huhtala & Eva Samakovlis, 2007. "Flows of Air Pollution, Ill Health and Welfare," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 37(2), pages 445-463, June. [Downloadable!] (restricted)
  13. Xin Meng & Nancy Qian, 2009. "The Long Term Consequences of Famine on Survivors: Evidence from a Unique Natural Experiment using China's Great Famine," NBER Working Papers 14917, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  14. David E. Bloom & David Canning & Jaypee Sevilla, 2001. "Economic Growth and the Demographic Transition," NBER Working Papers 8685, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. Huhtala, Anni & Samakovlis, Eva, 2003. "Green Accounting, Air Pollution and Health," Working Paper 82, National Institute of Economic Research.
  16. António Afonso & Werner Ebert & Ludger Schuknecht & Michael Thöne, 2005. "Quality of public finances and growth," Working Paper Series 438, European Central Bank. [Downloadable!]
  17. Néstor Duch, 2005. "Vertical linkages, agglomeration and the organization of production in European regions," Working Papers 2005/6, Institut d'Economia de Barcelona (IEB). [Downloadable!]
  18. Maureen Were & Nancy N. Nafula, 2003. "An Assessment of the Impact of HIV/AIDS on Economic Growth: The Case of Kenya," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  19. Clive Bell & Shantayanan Devarajan & Hans Gersbach, 2003. "The long-run economic costs of AIDS : theory and an application to South Africa," Policy Research Working Paper Series 3152, The World Bank. [Downloadable!]
  20. Sequeira, Tiago Neves, 2004. "Mortality Rate and Property Rights in a Model with Human Capital and R&D," FEUNL Working Paper Series wp455, Universidade Nova de Lisboa, Faculdade de Economia. [Downloadable!]
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  21. Lixin Cai, 2007. "Effects of Health on Wages of Australian Men," Melbourne Institute Working Paper Series wp2007n02, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
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  22. Helje Kaldaru & Kaie Kerem & Andres Võrk, 2004. "Health as Factor of Economic Growth: the Estonian Case," Working Papers 110, School of Economics and Business Administration, Tallinn University of Technology. [Downloadable!]
  23. Richard S.J. Tol, 2002. "Climate, Development And Malaria: An Application Of Fund," Working Papers FNU-16, Research unit Sustainability and Global Change, Hamburg University, revised Sep 2002. [Downloadable!]
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