Economic Complexity and Health: The Case of G-7 Countries

Economic complexity refers to the diversity and sophistication of the productive capacities within an economy. Therefore, it provides important insights into the capabilities of economies and their potential growth levels. By increasing their level of economic complexity, countries can improve their economic performance and socioeconomic status. Given that socioeconomic status, a key determinant of health, has a profound impact on health outcomes, the relationship between a country's health status and its economic complexity presents a multifaceted and intriguing area of research for policymakers. The impact of economic complexity on health is explained through indirect transmission mechanisms. In this context, the aim of this study is to examine the impact of economic complexity on health in the G-7 countries using data from the period 1995-2021. The findings obtained from the Fixed Effects Driscoll-Kraay estimator reveal that economic complexity has a positive impact on health (life expectancy at birth). In other words, a one-unit increase in economic complexity increases life expectancy at birth by 0.120 units. Therefore, in G-7 countries, the returns provided by economic complexity can be transformed into health-promoting practices through policies that support the social determinants of health.