THE RELATIONSHIP BETWEEN HUMAN DEVELOPMENT AND HEALTH EXPENDITURES: EVIDENCE FROM THE DRISCOLL-KRAAY ESTIMATOR

Abstract

In this study employing panel data methods, it was aimed to econometrically test the relationship between human development and health expenditures in 25 OECD countries using data from the 2003-2019 period. For this purpose, in the econometric model established, the Human Development Index is included as the dependent variable to represent human development, while public health expenditures and household voluntary health expenditures are included as independent variables to represent health expenditures. The results of the empirical analyses indicate a positive and statistically significant relationship between health expenditures and human development. Accordingly, considering the overall panel based on the aforementioned period and group of countries, it is concluded that a 1 unit increase in public health expenditures increases the Human Development Index value by 0.11 units. Similarly, it was observed that a 1 unit increase in household voluntary health expenditures also increases the Human Development Index value by 0.03 units. Therefore, it is concluded that increases in investments in health, both by the public sector and at the household level, and thus the increase in health expenditures, will support human development in this group of countries.

Keywords

• Human Development Index
• Health expenditures
• Panel data

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