Education, Health, and Economic Growth Nexus: A Bootstrap Panel Granger Causality Analysis for Developing Countries

Year 2018, Volume: 26 Issue: 36, 125 - 144, 30.04.2018

Hüseyin Şen , Ayşe Kaya , Barış Alpaslan

https://doi.org/10.17233/sosyoekonomi.2018.02.07

Cited By: 12

Abstract

This paper studies an empirical analysis of the causality between education expenditure, health expenditure, and economic growth for the selected eight developing countries (Argentina, Brazil, Chile, India, Indonesia, Mexico, South Africa, and Turkey) over the period 1995-2012. For this purpose, we employ the Bootstrap Panel Granger Causality test. Our findings indicate that only in two of eight developing countries (Brazil and Mexico) there exists a significant and positive causality, running from education and health expenditure to economic growth. However, we found a significant but negative causality among education expenditure, health expenditure, and economic growth for Indonesia. For the rest of the countries that we consider in this paper, no causality was found between these variables.

Keywords

Education Expenditure, Health Expenditure, Human Capital, Economic Growth

Eğitim, Sağlık ve Ekonomik Büyüme İlişkisi: Gelişmekte Olan Ülkeler için Bootstrap Panel Granger Nedensellik Analizi

Abstract

Bu çalışma, Bootstrap Panel Granger nedensellik testini kullanarak seçilmiş sekiz gelişmekte olan ülke (Arjantin, Brezilya, Şili, Hindistan, Endonezya, Meksika, Güney Afrika ve Türkiye) özelinde eğitim ve sağlık harcamaları ile ekonomik büyüme arasındaki nedensellik ilişkisini 1995-2012 dönemi için ampirik olarak analiz etmektedir. Ampirik bulgular, analize konu olan sekiz gelişmekte olan ülkeden yalnızca ikisinde (Brezilya ve Meksika) eğitim ve sağlık harcamalarından ekonomik büyümeye doğru anlamlı ve pozitif yönlü bir Granger nedensellik ilişkisi olduğunu, birinde (Endonezya) ise eğitim ve sağlık harcamaları ile ekonomik büyüme arasında anlamlı ancak negatif yönlü bir Granger nedensellik ilişkisi olduğunu ortaya koymuştur. Diğer ülkeler için ise eğitim ve sağlık harcamaları ile ekonomik büyüme arasında herhangi bir Granger nedensellik ilişkisi tespit edilememiştir.

Keywords

Eğitim ve Sağlık Harcamaları, Ekonomik Büyüme, Gelişmekte Olan Ülkeler, Bootstrap Panel Granger Nedensellik Analizi

References

• Agénor, P.-R. (2012), Public Capital, Growth and Welfare, Princeton University Press, Princeton: New Jersey.
• Ahmed, A. and Arends-Kuenning, M. (2006), “Do Crowded Classrooms Crowd Out Learning? Evidence from the Food for Education Program in Bangladesh”, World Development, Vol: 34, pp. 665-84.
• Albouy, V. and Lequien, L. (2009), “Does Compulsory Education Lower Mortality?”, Journal of Health Economics, Vol: 28(1), pp. 155-168.
• Arendt, J.N. (2005), “Does Education Cause Better Health? A Panel Data Analysis Using School Reforms for Identification”, Economics of Education Review, Vol: 24(2), pp. 149-160.
• Barro, R. (1991), “Economic Growth in a Cross-Section of Countries”, Quarterly Journal of Economics, Vol: 106 (2), pp. 407-443.
• Barro, R. J. (1997), Determinants of Economic Growth: A Cross-Country Empirical Study, MIT Press: Cambridge, Mass.
• Barro, R. and Lee, J-W. (1993), “International Comparisons of Educational Attainment”, Journal of Monetary Economics, Vol: 32(3), pp. 363-394.
• Barro, R. J. and Sala-i-Martin, X. (1995), Economic Growth, McGraw-Hill: New York.
• Behrman, J.R. (1996), “The impact of Health and Nutrition on Education”, World Bank Research Observer, Vol: 11(1), pp. 23-37.
• Benhabib, J. and Spiegel, M. (1994), “The Role of Human Capital in Economic Development: Evidence from Cross-Country Data”, Journal of Monetary Economics, Vol: 34, pp. 143-173.
• Bhargava, A., Jamison, D. T. L., Lau, J. and Murray, C. J. L. (2001), “Modeling the Effects of Health on Economic Growth”, Journal of Health Economics, Vol: 20(3), pp. 423-440.
• Bils, M., and Klenow, P. J. (2000), “Does Schooling Cause Growth”, American Economic Review, Vol: 90(5), pp. 1160-1183.
• Bleakley, H. (2007), “Disease and Development: Evidence from Hookworm Eradication in the American South”, Quarterly Journal of Economics, Vol: 122, pp. 73-117.
• Bloom, D. E., Canning, D. and Sevilla, J. (2004), “The Effect of Health on Economic Growth: A Production Function Approach”, World Development, Vol: 32, Issue: 1, pp. 1-13.
• Bloom, D. E. and Williamson, J. (1998), “Demographic Transitions and Economic Miracles in Emerging Asia”, World Bank Economic Review, Vol: 12, pp. 419-455.
• Boccanfuso, D., Savard, L., and Savy, B.E. (2013), “Human Capital and Growth: New Evidences from African Data”, International Economic Journal, Vol: 27, No: 1, pp. 55-77.
• Breusch, T. and Pagan, A. (1980), “The Lagrange Multiplier Test and Its Application to Model Specifications in Econometrics”, Reviews of Economics Studies, Vol: 47, pp. 239-253.
• Cheng, B.S. and Hsu, R.C. (1997), “Human Capital and Economic Growth in Japan: An Application of Time Series Analysis”, Applied Economics Letters, Vol: 4, pp. 393-395.
• Clark, D. and Royer, H. (2010). “The Effect of Education on Adult Health and Mortality: Evidence from Britain”, National Bureau of Economic Research, NBER Working Paper, No: 16013.
• Cooray, A. (2013), “Does Health Capital Have Differential Effects on Economic Growth?”, Applied Economics Letters, Vol: 20, pp. 244–249.
• Eide, R. E. and Showalter, M. H. (2011), “Estimating the Relation between Health and Education: What Do We Know and What Do We Need to Know?”, Economics of Education Review, Vol: 30, pp. 778– 791.
• Fogel, R.W. (1994), “Economic Growth, Population Health and Physiology: The Bearing of Long-term Processes on the Making of Economic Policy”, American Economic Review, Vol: 84, pp. 369–395.
• Freire-Serén, M.J. (2002), “On the Relationship between Human Capital Accumulation and Economic Growth”, Applied Economics Letters, No: 9, pp. 805-808.
• Gemmell, N. (1996), “Evaluating the Impacts of Human Capital Stocks and Accumulation on Economic Growth: Some New Evidence”, Oxford Bulletin of Economics and Statistics, Vol: 58(1), pp. 9-28.
• Gyimah-Brempong, K., and Wilson, M. (2004), “Health, Human Capital, and Economic Growth in Sub-Saharan African and OECD Countries”, Quarterly Review of Economics and Finance, Vol: 44, pp. 296-320.
• Hanushek, E. A. and Kimko, D. D. (2000), “Schooling, Labor-Force Quality, and the Growth of Nations”, American Economic Review, Vol: 90(5), pp. 1184-1208.
• Hartwig, J. (2010), “Is Health Capital Formation Good for Long-Term Economic Growth? – Panel Granger Causality Evidence for OECD Countries”, Journal of Macroeconomics, Vol: 32, Issue: 1, pp. 314-325.
• Hoddinott, J., Alderman, H. and Behrman, J. (2005), “Nutrition, Malnutrition and Economic Growth” in Health and Economic Growth: Findings and Policy Implications, ed. by Guillem López-Casasnovas, Berta Rivera, and Luis Currais, MIT Press: Cambridge, Mass.
• Hsiao, C. (1981), “Autoregressive Modeling and Money Income Causality Detection”, Journal of Monetary Economics, Vol: 7, pp. 85–106.
• Hurlin, C. (2008), Testing for Granger Non Causality in Heterogeneous Panels, Mimeo. Department of Economics: University of Orleans.
• Hurt, L.S., Ronsmans, C., and Saha, S. (2004). “Effects of Education and Other Socioeconomic Factors on Middle Age Mortality in Rural Bangladesh”, Journal of Epidemiology and Community Health, Vol: 58(4), pp. 315-320.
• In, F. and Doucouliagos, C. (1997), “Human Capital Formation and US Economic Growth: A Causality Analysis”, Applied Economics Letters, Vol: 4, pp. 329-331.
• Islam, N. (1995), “Growth Empirics: A Panel Data Approach”, Quarterly Journal of Economics, Vol: 110(1195), pp. 1127-1170.
• Jamison, Dean T., Lau, L. J. and Wang, J. (2005), “Health’s Contribution to Economic Growth in an Environment of Partially Endogenous Technical Progress”, in Health and Economic Growth: Findings and Policy Implications, ed. By Guillem López-Casasnovas, Berta Rivera, and Luis Currais, MIT Press: Cambridge, Mass.
• Jayachandran, S., and Lleras-Muney, A. (2009), “Longevity and Human Capital Investments: Evidence from Maternal Mortality Declines in Sri Lanka”, Quarterly Journal of Economics, Vol: 124(1), pp. 349-397.
• Jensen, R. and Lleras-Muney, A. (2012), “Does Staying in School (and Not Working) Prevent Teen Smoking and Drinking?” Journal of Health Economics, Vol: 31(4), pp. 644-675.
• Kónya, L. (2006), “Exports and Growth: Granger Causality Analysis on OECD Countries with a Panel Data Approach”, Economic Modelling, Vol: 23(6), pp. 978-992.
• Krueger, A. B. and Lindahl, M. (2001), “Education for Growth: Why and for Whom?”, Journal of Economic Literature, Vol: 39(4), pp. 1101-1136.
• Li, H. and Liang, H. (2010), “Health, Education, and Economic Growth in East Asia”, Journal of Chinese Economic and Foreign Trade Studies, Vol: 3, No: 2, pp. 110-131.
• Lucas, R.E. (1988). “On the Mechanics of Economic Development”, Journal of Monetary Economics, Vol: 22, pp. 3-42.
• Mankiw, G., Romer, D. and Weil, D. (1992), “A Contribution to the Empirics of Economic Growth”, Quarterly Journal of Economics, Vol: 107, pp. 407-437.
• Mayer-Foulkes, D. (2001), ‘The Long-Term Impact of Health on Economic Growth in Mexico, 1950-1995’, Journal of International Development, Vol: 13(1), pp.123-126.
• McDonald, S., and Roberts, J. (2006), “AIDS and Economic Growth: A Human Capital Approach”, Journal of Development Economics, Vol: 80, pp. 228-50.
• Miguel, E. and Kremer, M. (2004), “Worms: Identifying Impacts on Education and Health in the Presence of Treatment Externalities”, Econometrica, Vol: 72(1), pp.159-217.
• Nomura, T. (2007), “Contribution of Education and Educational Equality to Economic Growth”, Applied Economics Letters, Vol: 14, pp. 627-630.
• Pesaran, M.H. (2004), General Diagnostic Tests for Cross Section Dependence in Panels, CESifo Working Paper, 1229, IZA Discussion Paper, 1240.
• Pesaran, M.H. and Yamagata, T. (2008), “Testing Slope Homogeneity in Large Panels”, Journal of Econometrics, Vol: 142(1), pp. 50-93.
• Pesaran, M.H., Ullah, A. and Yamagata, T. (2008), “A Bias-Adjusted LM Test of Error Crosssection Independence”, Econometrics Journal, Vol: 11 (1), pp. 105-127.
• Rivera, B. and Currais, L. (1999), “Economic Growth and Health: Direct Impact or Reverse Causation?”, Applied Economics Letters, No: 6, pp. 761-764.
• Romer, P.M. (1986), “Increasing Returns and Long-run Growth”, Journal of Political Economy, Vol: 94(10), pp. 1002-1037.
• Romer, P. (1989), Human Capital and Growth: Theory and Evidence, National Bureau of Economic Research, NBER Working Paper, No: 3137.
• Sachs, J.D. and Warner, A. (1997), “Fundamental Sources of Long-run Growth”, American Economic Review, Papers and Proceedings, Vol: 87, 2, pp. 184-88.
• Sala-i-Martin, X. (1997), “I Just Ran Four Million Regressions”, National Bureau of Economic Research, NBER Working Paper, No: 6252. Sala-i-Martin, X., Doppelhofer, G. and Miller, R. I. (2004), “Determinants of Long-Term Growth: A Bayesian Averaging of Classical Estimates (BACE) Approach”, American Economic Review, Vol: 94, pp. 813-35.
• Sianesi, B. and Reenen, J. (2003), “The Returns to Education: Macroeconomics”, Journal of Economic Surveys, Vol: 17(2), pp.157-200.
• Soares, R. R. (2006), “The Effect of Longevity on Schooling and Fertility: Evidence from the Brazilian Demographic and Health Survey”, Journal of Population Economics, Vol: 19, pp. 71-97.
• Strauss, J. and Thomas, D. (1998), “Health, Nutrition and Economic Development”, Journal of Economic Literature, Vol: 36, pp. 766-817.
• Swamy, P.A.V.B. (1970), “Efficient Inference in a Random Coefficient Regression Model”, Econometrica, Vol: 38 (2), pp. 311-323.
• Tamura, R. (2006), “Human Capital and Economic Development”, Journal of Development Economics, Vol: 79, pp. 26-72.
• Temple, J. (1999), “A Positive Effect of Human Capital on Growth”, Economic Letters, Vol: 65, pp. 131-134.
• Tsamadias, C. and Prontzas, P. (2012), “The Effect of Education on Economic Growth in Greece over the 1960-2000 Period”, Education Economics, Vol: 20, No: 5, pp. 522-537. UN (2005), The Millennium Development Goals Report 2005, United Nations: New York.
• UNAIDS (2004), Report on the Global AIDS Epidemic, World Health Organization: Geneva.
• Uneze, E. (2013), “The Relation between Capital Formation and Economic Growth: Evidence from Sub-Saharan African Countries”, Journal of Economic Policy Reform, Vol: 16, No: 3, 272-286.
• Wang, X. and Taniguchi, K. (2003), “Does Better Nutrition Enhance Economic Growth? Impact of Undernourishment”, in Nutrition Intake and Economic Growth, ed. by K. Taniguchi and X. Wang, Food and Agriculture Organization: Rome.
• Weil, D. N. (2007), “Accounting for the Effect of Health on Economic Growth”, Quarterly Journal of Economics,Vol: 122, pp. 1265-305.
• WHO (2007), The World Health Report 2007–A Safer Future: Global Public Health Security in the 21st Century, WHO Publications, World Health Organization: Geneva.
• World Development Report (1993), Investing in Health, A Report by the World Bank, World Bank: Washington D.C.
• Zhang, J., Zhang, J. and Lee, R. (2003), “Rising Longevity, Education, Savings, and Growth”, Journal of Development Economics, Vol: 70(1), pp. 83-101.