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The impact of health sector on R&D, economic growth and wages

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  • Oscar Afonso
  • Ana Sarabanda

Abstract

We extend the existing R&D growth literature by focusing on the short-, medium-, long-run effects of the health sector on R&D intensity, economic growth and wages, and by considering 21 OECD countries between 1991 and 2008. We show that: (i) there is a unique and stable steady state; (ii) an increase in health-labour share in skilled population has no effect on growth, but affects negatively (positively) the R&D intensity (the skill premium); (iii) Anglo--Saxons countries have the lowest health-labour share in skilled-labour population, and Nordic countries have the lowest skill premium and the highest consumption/production of healthcare per capita .

Suggested Citation

  • Oscar Afonso & Ana Sarabanda, 2016. "The impact of health sector on R&D, economic growth and wages," Applied Economics Letters, Taylor & Francis Journals, vol. 23(14), pages 1006-1011, September.
    • Handle: RePEc:taf:apeclt:v:23:y:2016:i:14:p:1006-1011
    DOI: 10.1080/13504851.2015.1128069
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    1. Matthew D. Shapiro & Christopher L. House, 2006. "Phased-In Tax Cuts and Economic Activity," American Economic Review, American Economic Association, vol. 96(5), pages 1835-1849, December.
    2. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    3. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-784, August.
    4. van Zon, Adriaan & Muysken, Joan, 2001. "Health and endogenous growth," Journal of Health Economics, Elsevier, vol. 20(2), pages 169-185, March.
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    Cited by:

    1. Mahmoud M. SABRA, 2022. "Health expenditure, life expectancy, fertility rate, CO2 emissions and economic growth Do public, private and external health expenditure matter?," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(632), A), pages 89-102, Autumn.
    2. N.M. Odhiambo, 2021. "Health Expenditure and Economic Growth in Sub-Saharan Africa: An Empirical Investigation," Working Papers AESRI-2021-05, African Economic and Social Research Institute (AESRI), revised Jan 2021.
    3. Nicholas M. Odhiambo, "undated". "Health Expenditure and Economic Growth in sub-Saharan Africa: An Empirical Investigation," Working Papers AESRIWP05, African Economic and Social Research Institute (AESRI).

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