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Health and Income Variation - A Panel Data Study on the Developed and Less Developed Economies

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  • I- Ming Chiu
  • Tetsuji Yamada
  • Chia-Ching Chen

Abstract

In this paper, human capital in the form of 'health status' is introduced into a neoclassical economic growth model as one of the main factors differentiating rich and poor countries. Various panel data models are used to examine how health and other growth factors affect average income in different countries. Our main empirical finding indicates that a one-year increase in life expectancy (the health status measure) raises GDP per capita by 0.5-0.9%. Based on this result, a baseline health status can be established to help poor countries achieve a targeted economic growth rate.

Suggested Citation

  • I- Ming Chiu & Tetsuji Yamada & Chia-Ching Chen, 2011. "Health and Income Variation - A Panel Data Study on the Developed and Less Developed Economies," International Economic Journal, Taylor & Francis Journals, vol. 25(2), pages 305-318.
    • Handle: RePEc:taf:intecj:v:25:y:2011:i:2:p:305-318
    DOI: 10.1080/10168737.2010.504217
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