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Investigating The Dynamic Effect of Healthcare Expenditure and Education Expenditure On Economic Growth in Organisation of Islamic Countries (OIC)

Author

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  • Abdul Wahab, Abdul Azeez Oluwanisola
  • Kefeli, Zurina
  • Hashim, Nurhazirah

Abstract

The socio-economic development level of any country has been significantly attached to the state of healthcare and well-being of its people. Moreover, it is unequivocal that healthy people have substantial influences on economic advancement of a country because when they live longer there is tendency that they will be more productive. On the other hand, the standpoint of education on economic growth cannot be underscored as it serves as method of evolution and progression of personalities and an essential indicator of broad production of the national income. Nevertheless, this paper examines the dynamic effect of healthcare expenditure and education expenditure on economic growth using evidence from Organization of Islamic Cooperation (OIC) countries. The study applied Pool Mean Group (PMG) method by using 1990 to 2015 data. The study reveals a robust long-run co-integrating relationship between healthcare expenditure, education expenditure, research and development and the economic growths of OIC countries. Besides, the short-run effects indicates that, healthcare expenditure per capita significantly impact economic growth of OIC countries, while the education expenditure and research and development (technology) were insignificantly impact economic growth of OIC countries in the short-run. Albeit, the findings of the study short-run specific-effects concluded that, there is existence of a co-integrating relationship between the healthcare, education, technology and economic growth in 36 out of the 56 OIC countries, while 20 other countries have no co-integrating relationship with the economic growths. However, the study suggests that healthcare and education are device to further attain economic growth and development in OIC countries if well managed and administered.

Suggested Citation

  • Abdul Wahab, Abdul Azeez Oluwanisola & Kefeli, Zurina & Hashim, Nurhazirah, 2018. "Investigating The Dynamic Effect of Healthcare Expenditure and Education Expenditure On Economic Growth in Organisation of Islamic Countries (OIC)," MPRA Paper 90338, University Library of Munich, Germany, revised 19 Oct 2018.
    • Handle: RePEc:pra:mprapa:90338
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    References listed on IDEAS

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    Keywords

    Economic growth; healthcare expenditure; education expenditure; OIC countries;

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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