The contribution of publicly provided health to growth and productivity

Abstract

The aim of this paper is to analyze the effect of public health expenditure on productivity. We develop an extension of the augmented Solow model, which includes education and health as a means of explaining productivity. We run conditional convergence regressions for OECD countries, in order to verify the extent to which government consumption and government investment in health enters into the model explaining productivity. The major conclusion of this research is that government consumption in health has consistently positive effects with respect to productivity, while government investment has no effect on productivity.