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The Effect of Health on Economic Growth: Theory and Evidence

26 Pages Posted: 10 Nov 2001  

David E. Bloom

Harvard University - T.H. Chan School of Public Health; National Bureau of Economic Research (NBER)

David Canning

Queen's University Belfast

Jaypee Sevilla

Harvard University - T.H. Chan School of Public Health

Date Written: November 2001

Abstract

Macroeconomists acknowledge the contribution of human capital to economic growth, but their empirical studies define human capital solely in terms of schooling. In this paper, we extend production function models of economic growth to account for two additional variables that microeconomists have identified as fundamental components of human capital: work experience and health. Our main result is that good health has a positive, sizable, and statistically significant effect on aggregate output. We find little variation across countries in average work experience, thus differentials in work experience account for little variation in rates of economic growth. Finally, we find that the effects of average schooling on national output are consistent with microeconomic estimates of the effects of individual schooling on earnings, suggesting that education creates no discernible externalities.

Suggested Citation

Bloom, David E. and Canning, David and Sevilla, Jaypee, The Effect of Health on Economic Growth: Theory and Evidence (November 2001). NBER Working Paper No. w8587. Available at SSRN: https://ssrn.com/abstract=290389

David E. Bloom (Contact Author)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Harvard University - T.H. Chan School of Public Health ( email )

677 Huntington Avenue
Boston, MA 02115
United States
617-432-0654 (Phone)

Dave Canning

Queen's University Belfast ( email )

Department of Economics
Belfast BT7 1NN
Northern Ireland
44-2890-273281 (Phone)

Jaypee Sevilla

Harvard University - T.H. Chan School of Public Health ( email )

677 Huntington Avenue
Boston, MA 02115
United States
617-432-4054 (Phone)

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