Graduate Program

Aging Studies

Degree Name

Master of Arts (MA)

Semester of Degree Completion

2014

Thesis Director

Daniel C. Hickman

Thesis Committee Member

Ali Moshtagh

Thesis Committee Member

Mukti Upadhyay

Abstract

This paper assesses the impact of health expenditure on economic growth for countries at different income levels. A panel dataset over the period of 1995 to 2011 for 136 member countries is taken into consideration. These countries are segregated into four groups according to their income. Based on the regression analysis, the study investigates the effect of health spending on gross domestic product by applying panel least squares along with country and year fixed effects. The study reveals that health expenditure per capita has a significant positive effect on gross domestic product not only for high and upper middle income countries but also for low and lower middle income countries. We see the impact of health expenditure for first two groups (high income and upper middle income countries) are slightly higher than last two groups (low income and lower middle income countries). Though the results illustrate the usefulness of health care spending irrespective of the nature and level of income of the countries, focusing only on health care spending may not be effective for economic development unless integrated health service facilities are ensured to achieve the broader goals of poverty reduction, human capital formation, and economic development.

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