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Healthy, educated and wealthy: A primer on the impact of public and private welfare expenditures on economic growth

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  • Beraldo, Sergio
  • Montolio, Daniel
  • Turati, Gilberto

Abstract

In this paper, we provide first evidence of the impact of public and private expenditures in health and education on economic growth, via their influence on people's health, skills and knowledge. We consider a growth accounting framework in order to test whether countries that devote a larger amount of resources to the consumption of health and educational services experience higher growth rates. We also test whether the effects on economic growth of public expenditure in health and education differ from those of private expenditure. Our empirical analysis is based on a panel of 19 OECD countries observed between 1971 and 1998. The results are consistent with the hypothesis that health and education expenditure affects positively growth. The estimated impact is stronger for health than for education. More importantly, we find some evidence that public expenditure influences GDP growth more than private expenditure.

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  • Beraldo, Sergio & Montolio, Daniel & Turati, Gilberto, 2009. "Healthy, educated and wealthy: A primer on the impact of public and private welfare expenditures on economic growth," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(6), pages 946-956, December.
  • Handle: RePEc:eee:soceco:v:38:y:2009:i:6:p:946-956
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    Cited by:

    1. Alper Aslan & Angeliki Menegaki & Can Tugcu, 2016. "Health and economic growth in high-income countries revisited: evidence from an augmented production function for the period 1980–2009," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(2), pages 937-953, March.
    2. Fatulescu, Puiu, 2011. "Cheltuielile Publice în domeniul Sănătății- principalii factori care le influențează
      [Public Health Systems Expenditures and the main factors that drives them]
      ," MPRA Paper 37191, University Library of Munich, Germany.
    3. Ding, Hong, 2012. "Economic growth and welfare state: a debate of econometrics," MPRA Paper 39685, University Library of Munich, Germany.
    4. Ding, Hong, 2012. "Is government’s help for unemployed people helpful for the society? An Empirical Study on Macro Data of Public Unemployment Spending in OECD Nations," MPRA Paper 43132, University Library of Munich, Germany.
    5. Cockx, Lara & Francken, Nathalie, 2016. "Natural resources: A curse on education spending?," Energy Policy, Elsevier, vol. 92(C), pages 394-408.
    6. Silvia Fedeli, 2015. "The Impact of GDP on Health Care Expenditure: The Case of Italy (1982–2009)," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 122(2), pages 347-370, June.
    7. Siwarat Kuson & Songsak Sriboonchitta & Peter Calkins, 2012. "Household determinants of poverty in Savannakhet, Laos: Binary choice model approach," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 1(3), pages 33-52, September.
    8. Ding, Hong, 2012. "Unemployment and Welfare State: What do the Data Tell Us?," MPRA Paper 41921, University Library of Munich, Germany.
    9. Iga Rudawska, 2013. "Chronic Diseases Burden on the Economy—A Problem Reaching Beyond Health Care," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 32.
    10. João Sousa Andrade & Marta Simões & Adelaide Duarte, 2013. "Despesa Pública em Educação e Saúde e Crescimento Económico: Um Contributo para o Debate sobre as Funções Sociais do Estado," GEMF Working Papers 2013-18, GEMF, Faculty of Economics, University of Coimbra.

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