Threshold Effects of Health on Economic Growth in Sub-Saharan African Countries: Evidence from a Dynamic Panel Threshold Model

Abstract

Threshold Effects of Health on Economic Growth in Sub-Saharan African Countries: Evidence from a Dynamic Panel Threshold Model Jeffrey Kouton, Coffie Francis José N’guessan, Firmin Ayivodji Abstract This paper investigates the presence of threshold effects in the health-economic growth nexus for 24 Sub-Saharan Africa countries. We apply a dynamic panel threshold model and find that health human capital stock, measured by life expectancy at birth, has a positive and significant impact on economic growth. This impact becomes more important as health investments, captured by public health expenditures, increase. We estimate a threshold of 3.5% of the ratio public health expenditures/GDP above which life expectancy at birth has a higher impact on economic growth. This may be due to the fact that even if life expectancy is increased, individuals will not be productive unless they are able to maintain and improve their health status. We recommend investments in health in order to make drugs purchase much easier. More investments should be devoted to fight malaria, HIV/AIDS and diseases with a high morbidity that reduce the productivity of individuals. Full Text: PDF DOI: 10.15640/jeds.v6n4a3