The Effect of Female and Male Health on Economic Growth: Cross-Country Evidence within a Production Function Framework

Adopting a production function based approach, we model the role of health as a regular factor of production on economic growth, and use disaggregate measures of male and female health capital using principal components analysis. Allowing for the dynamics of TFP to be embedded in the production function, we estimate it both in levels and in growth rates to distinguish between long- and short-run effects. We use appropriate panel cointegration methodology to control for endogeneity, cross-sectional dependence and heterogeneity. Our main finding is that while male and female health capital stock has a significantly positive effect on level of output in the long-run, changes in gender disaggregated health capital has a negative or insignificant effect on output growth in the short-run.