Academic journal article Economics & Sociology

Economic Growth and Health: A Comparative Study of the Eu Countries

Academic journal article Economics & Sociology

Economic Growth and Health: A Comparative Study of the Eu Countries

Article excerpt

Introduction

Over the last several decades, it has become common to emphasize the role of the intangible forms of capital as an economic development factor. By accepting the assumption that health condition constitutes an element of human capital, an analysis of interactions between health and economic growth has become the subject of theoretical and empirical research. In spite of potentially obvious dependences between health condition, living standards in society and the efficiency of production factors in the macroeconomic scale, there has still been no explicit explanation of this mechanism. In literature, the gravity of the so-called boundary (initial) conditions within the framework of which the mechanism is observed is indicated. By assumption, they determine the correlation level of variables in the model of interactions between health and economic growth, which varies for different research samples. No conformity of the reaction model that diverges from the commonly excepted one is observed first of all in the countries with a high level of economic development, where the effect of the health condition improvement as a result of an increased level of national product is not so self-evident.

The purpose of the present study is the analysis of relations that occur between the economic development level of national economies and the health condition of societies. Attention focuses on indicating the existing dependences in this area, the ones which are observed in the European Union member states. An attempt is made to identify differences that occur in this area on the level of the economies of the so-called "old" and "new" European Union.

The research was based on the data available on the level of NUTS 1 that describes the health condition of society in individual states. Due to the assumed scope of the analysis, indices that define life expectancy (LE) and predicted healthy life years (HLY) were accepted as the dependent variables. In the assessment of the impact of production capacities on "the capital of health" of the economies examined, an index of structure was used that determines the participation of predicted healthy life years in life expectancy. In the research into relations, a regression analysis was used, and an assessment was performed of the degree of correlation between the domestic per capita product level and the level of the dependent variables that describe the health condition of society in the EU economies examined. Due to the accepted scope of analysis, the empirical data used was obtained from the databases of the World Bank, the World Health Organization (WHO) and Eurostat.

1.Health and income: potential links

The results of theoretical and empirical analysis presented in the literature point to a bidirectional relation between health and the national income level. An increase of the health "resource", similarly as an increase of human capital, constitutes both the cause and the consequence of the economic growth in a given state. The mechanism of the impact of economic growth on the health of population seems obvious: an increase of the national income level potentially determines a higher health spending level, greater possibilities of education and better food quality. Preston (1975) was one of the first ones to examine this relation. He acknowledged that the domestic per capita income is an index of the total value of final products manufactured in a given economy per capita in a specified period of time. As a consequence, there are no reasons to expect a direct influence of this parameter on the level of the health (mortality) of society. Income should be treated as a measure of the pace of an introduction of new products and services in the sector of households and enterprises. Its influence is indirect: a higher income offers a possibility of a real increase of the consumption of such elements that have an influence on health as food, accommodation, public and private healthcare, education, research connected with an improvement of health condition (Preston, 1975). …

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