The influence of health on economic growth from the perspective of sustainable development: a case of OECD countries

Abstract

Purpose: This study aims to explain the role of health on economic growth for OECD countries in the context of sustainable development. Accordingly, the study investigates the relationship between health and economic growth in OECD countries. Design/methodology/approach: This study employed cluster analysis and econometric methods. By cluster analysis, 12 OECD countries (France, Germany, Finland, Slovenia, Belgium, Portugal, Estonia, Czech Republic, Hungary, South Korea, Poland and Slovakia) were classified into two clusters as high and low health status through health indicators. For panel threshold analysis, the data included growth rates, life expectancy at birth, export rates, population data, fixed capital investments, inflation and foreign direct investment for the period of 1999–2016. Findings: The study determined two main clusters as countries with high health status (level) and low health status (level), but there was no threshold effect in clusters. It was concluded that an increase in the life expectancy at birth of countries with higher health status had no significant impact on economic growth. However, the increase in the life expectancy at birth of countries with lower health status influenced economic growth positively. Research limitations/implications: This study used data that including period of 1999–2016 for OECD countries. In addition, the study used cluster analysis to determine health status of countries, and then panel threshold analysis was preferred to explain significant relations. Originality/value: This study showed that the role of health on economic growth can change toward country groups as higher and lower health status. It was proved that higher life expectancy can influence economic growth positively in countries with worse or low health status. In this context, developing countries, which try to achieve sustainable development, should improve their health status to achieve economic and social development at the same time. © 2020, Emerald Publishing Limited.