Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/181554
Authors: 
Schünemann, Johannes
Bloom, David E.
Canning, David
Kotschy, Rainer
Prettner, Klaus
Year of Publication: 
2018
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2018: Digitale Wirtschaft - Session: Development Economics III G14-V2
Abstract: 
There are two prominent methods to assess the effects of health on economic growth. The first is based on the estimated returns on health by means of Mincer wage regressions that are aggregated to derive the macroeconomic effects of population health. The second approach is based on the estimation of a generalized aggregate production function that decomposes human capital into its different components, in particular, population health. While the overwhelming majority of studies based on both methods indicates a positive effect of health on economic growth, the size of the effect is still subject to intensive debate. We show that, after appropriately controlling for potential spillover effects of population health at the aggregate level, the point estimate of the macroeconomic effect of health is remarkably close to the one found by aggregating the microeconomic effects. Specifically, an increase in the adult survival rate of 10 percentage points is associated with a 9.1 percent increase in labor productivity. This effect is sizable and adds a strong argument for investments in population health over and above the direct welfare benefits of good health.
Subjects: 
Productivity
Population Health
Micro-Macro Consistency
Human Capital
Economic Development
JEL: 
I15
I25
J11
O11
O15
Document Type: 
Conference Paper
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