Public Health Development and Economic Growth: Evidence From Chinese Cities

Abstract

High-quality construction of public health system is the key to maintain social economic activities be ordered and stable. The aim of this study is to understand whether public health development can promote economic growth and how. We construct a public health development index combining the variables of local pollution control and health care by EVM method. Based on the panel data of Chinese 283 cities from 2004 to 2017, fixed effect model and two-stage least squares model are used to test the impact of public health development on economic growth. Then, we discuss the heterogeneous impact of public health development on economic growth though the threshold regression model, under different government intervention, employment population scale and urbanization ratio. What’s more, we discuss the possible transmission effect of three human capital mechanisms, namely mortality, consumption rate and employment population size between public health development and economic growth. The conclusions are: (1) For every 0.1 unit increase in public health development, the growth rate of real GDP can be increased by 5 percentage points, which can drive the nominal GDP growth by about 0.17 percentage points. (2) Public health development can promote economic growth regardless of the scale of urban employment population. Only when the urbanization ratio exceeds 70.87 and the government intervention level is lower than 0.058, the development of public health is conducive to the improvement of urban economic development. (3) Public health development helps to promote economic growth, mainly through two paths, reducing mortality and increasing human capital accumulation. And, reducing mortality is more conducive to urban economic growth than increasing human capital accumulation.