Health and Development
40 Pages Posted: 30 Sep 2019
Date Written: September 16, 2019
In this paper we examine whether the Solow growth model is consistent with across-countries variations in standard of living once investments in education and health are explicitly and simultaneously taken into account. Using a sample of low- and middle-income economies, we provide evidence that per capita GDP is positively affected by population's health, here proxied by the life expectancy at birth. Public expenditure on health affects indirectly the level of per capita income through its positive effect on life expectancy. Using a Finite Mixture approach, we also show that richer economies are those where the impact of unobserved factors on the level of per capita income is stronger.
Keywords: Health, Education and Human Capital, Economic Development and Growth, Finite Mixture Models, Classication
JEL Classification: I15, I25, J24, O41, C14
Suggested Citation: Suggested Citation