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Do remittances enhance the economic growth effect of private health expenditures in West African Economic and Monetary Union?

Author

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  • Komivi Afawubo

    (CEREFIGE –Univ. of Lorraine and CRESE EA3190-Univ. of Bourgogne Franche-Comté)

  • Mawuli kodjovi Couchoro

    (CERFEG-University of Lomé, Togo)

Abstract

In this paper, we empirically analyze the relationship between private health expenditures and economic growth in West African Economic and Monetary Union (WAEMU), and the extent to which remittances moderate this relationship in a panel of WAEMU countries over the period 2000-2014. We use an endogenous growth model employing Fully Modified Ordinary Least Squares (FMOLS) and Ordinary Least Squares (OLS) methods. Our empirical results show that remittances have a positive and significant effect on economic growth. However, an increase in private health expenditures negatively affects the economic growth rate. Health expenditures may not lead to an increase in the level of human skills and an accumulation of human capital, and this situation decelerates economic growth. Furthermore, the interaction between remittances and private health expenditures has a negative effect on economic growth. These findings can be explained by the fact that the financing of private health expenditure through remittances is insufficient and inefficient and thus does not contribute to improving health status and building up human capital, which would play a part in economic growth.

Suggested Citation

  • Komivi Afawubo & Mawuli kodjovi Couchoro, 2017. "Do remittances enhance the economic growth effect of private health expenditures in West African Economic and Monetary Union?," Economics Bulletin, AccessEcon, vol. 37(2), pages 1247-1264.
    • Handle: RePEc:ebl:ecbull:eb-17-00152
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    References listed on IDEAS

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    1. Madsen, Jakob B., 2016. "Health, Human Capital Formation And Knowledge Production: Two Centuries Of International Evidence," Macroeconomic Dynamics, Cambridge University Press, vol. 20(4), pages 909-953, June.
    2. Bloom, David E. & Canning, David & Sevilla, Jaypee, 2004. "The Effect of Health on Economic Growth: A Production Function Approach," World Development, Elsevier, vol. 32(1), pages 1-13, January.
    3. Theodore Lianos & Anastasia Pseiridis, 2009. "On the occupational choices of return migrants," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 21(2), pages 155-181, March.
    4. Mr. Alexei P Kireyev, 2006. "The Macroeconomics of Remittances: The Case of Tajikistan," IMF Working Papers 2006/002, International Monetary Fund.
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    Cited by:

    1. Afawubo, Komivi & Noglo, Yawo Agbényégan, 2019. "Remittances and deforestation in developing countries: Is institutional quality paramount?," Research in Economics, Elsevier, vol. 73(4), pages 304-320.

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    More about this item

    Keywords

    Remittances; Private health expenditures; Economic growth;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • I1 - Health, Education, and Welfare - - Health

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