Open AccessThe Effect of Private and Public Health Expenditure on Economic Growth in Sub-Saharan Africa
Author(s) -
Faith Yusufu,
Bosede Olanike Awoyemi,
Kehinde John Akomolafe
Publication year - 2021
Publication title -
journal of economics, management and trade
Language(s) - English
Resource type - Journals
ISSN - 2456-9216
DOI - 10.9734/jemt/2021/v27i1130375
Subject(s) - per capita , ceteris paribus , economics , short run , generalized method of moments , real gross domestic product , government (linguistics) , estimation , government spending , demographic economics , government expenditure , panel data , econometrics , monetary economics , macroeconomics , demography , public finance , market economy , population , linguistics , philosophy , management , sociology , welfare , microeconomics
This study examined the relationship between health expenditure and economic growth in sub-Saharan Africa. The General Method of Moments (GMM) estimation technique was used and the data covered the period 2000-2019 for forty-six countries. The results of the difference GMM-1 and GMM-2 steps indicate that a 1% change in public health expenditure per capita (LPUHE_PC) is associated with a 0.1362% and 0.1521% rise in GDP per capita (GDP_PC) in the short run. The system GMM-1 and GMM-2 steps indicate that a percentage change in LPUHE_PC is associated with a respective 0.0148% and 0.0109% rise in GDP_PC in the short run at a 1% level of significance, on average ceteris paribus. In the long run, the difference GMM-2 step indicates that a 1% change in the LPUHE_PC has a larger positive effect on the GDP_PC (1.34899%) than in the short-run (0.1521%). The result of the system GMM-1 and GMM-2 step indicates that a 1% change in LPUHE_PC has a larger positive effect on the GDP_PC in the long run (0.39967% and 0.24135%) than in the short-run (0.0148% and 0.0109%) respectively. This analysis indicates that a rise in government health spending will stimulate economic growth with a larger effect in the long run than in the short run in Sub-Saharan Africa. Thus, the government should increase health budgetary allocations.