The Relationship Between Economic Growth and Public Health Service Expenditures in Upper Middle-Income Countries

Özdemir Z., Okay Toprak A.

Trends in business and economics (Online), vol.37, no.3, pp.215-225, 2023 (Peer-Reviewed Journal) identifier


In this academic study, the specific correlation between economic growth and healthcare expen- ditures will be evaluated through the panel data analysis method, using the public healthcare expenditures data of 25 upper middle-income countries between the years 2000–2009. In the study, national general government expenditures per capita were used as a key indicator typi- cally representing healthcare expenditures. The explanatory variables in the model are the gross fixed capital formation and the ratio of employment to population. As a result of the extended Hausman test, it was decided that the model was suitable for the two-way fixed effects model. In the fixed effects model, the Driscoll–Kraay estimator was used because of the deviation from the basic assumptions. According to the apparent results of the economic model, there is remarkably a certain relationship between public healthcare expenditures and economic growth. In other words, the results of the economic analysis support the view that investments in the health sec- tor in upper middle-income countries lead to an increase in economic growth, primarily in its contribution to public health. In this direction, it is expected that the study will contribute to forthcoming studies in terms of emphasizing the importance of public investments in terms of actors and institutions in the health system.