Investigating the Effect of Health Status on Unemployment

According to the economic literature, Human capital can be considered as essential factor for economic development of countries such as labour force, capital, land and management. So that economists have known it as the motor of development. In the existing studies, education and health are introduced as two main aspects of human capital. In addition to the direct effect of education and health on economic growth, these factors can reduce the unemployment by improving the labour productivity, a subject which has been considered in few studies especially about health. In this study we focus on the effects of these factors on unemployment in 117 countries over the period 2005–2013 using panel data method. To do this, the life expectancy and education index are selected as proxies for human capital. The results show that there is a negative relationship between life expectancy and unemployment but, the effect of expected years of schooling as well as increase in mean years of schooling on unemployment is positively significant. In addition, the impacts of inflation and per capita gross national income on unemployment are negative and significant as well.