IDEAS home Printed from https://ideas.repec.org/a/spr/jknowl/v15y2024i1d10.1007_s13132-023-01318-5.html
   My bibliography  Save this article

The Role of Institutional Quality in Health Expenditure-Labor Force Participation Nexus in Africa

Author

Listed:
  • Olaide Sekinat Opeloyeru

    (Tai Solarin University of Education)

  • Temitope Olanike Faronbi

    (University of Ibadan)

  • Isiaka Akande Raifu

    (University of Ibadan)

Abstract

The study investigated the role of institutional quality in the relationship between health expenditure and labor force participation (LFP) in Africa, taking into consideration two forms of health expenditures (government health expenditure (GHE) and out-of-pocket health expenditure (OOPHE)) and gender labor force participation dichotomy. We employed data from 39 African countries for the period between 2000 and 2018 using Panel Fixed Effects with Driscoll and Kraay standard errors and a two-stage system Generalized Method of Moments (GMM). The results revealed that GHE yields an increasing effect on total, female, and male LFP. OOPHE, in most cases, leads to a decline in LFP. The institutional quality was found to be detrimental to LFP. The magnitude of the positive effect of GHE on LFP is reduced by the interaction of institutional quality with GHE. In conclusion, we advocate for the improvement in institutional apparatuses across African countries.

Suggested Citation

  • Olaide Sekinat Opeloyeru & Temitope Olanike Faronbi & Isiaka Akande Raifu, 2024. "The Role of Institutional Quality in Health Expenditure-Labor Force Participation Nexus in Africa," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 2241-2273, March.
    • Handle: RePEc:spr:jknowl:v:15:y:2024:i:1:d:10.1007_s13132-023-01318-5
    DOI: 10.1007/s13132-023-01318-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s13132-023-01318-5
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s13132-023-01318-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cai, Lixin, 2010. "The relationship between health and labour force participation: Evidence from a panel data simultaneous equation model," Labour Economics, Elsevier, vol. 17(1), pages 77-90, January.
    2. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472, Elsevier.
    3. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    4. John C. Driscoll & Aart C. Kraay, 1998. "Consistent Covariance Matrix Estimation With Spatially Dependent Panel Data," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 549-560, November.
    5. Agovino Massimiliano & Garofalo Antonio & Cerciello Massimiliano, 2019. "Do Local Institutions Affect Labour Market Participation? The Italian Case," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(2), pages 1-21, April.
    6. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, February.
    7. Serge Mandiefe Piabuo & Julius Chupezi Tieguhong, 2017. "Health expenditure and economic growth - a review of the literature and an analysis between the economic community for central African states (CEMAC) and selected African countries," Health Economics Review, Springer, vol. 7(1), pages 1-13, December.
    8. Ana María Iregui-Bohórquez & Ligia Alba Melo-Becerra & María Teresa Ramírez-Giraldo, 2016. "Health status and labor force participation: evidence for urban low and middle income individuals in Colombia," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 15(1), pages 33-55, April.
    9. Daniel Hoechle, 2007. "Robust standard errors for panel regressions with cross-sectional dependence," Stata Journal, StataCorp LP, vol. 7(3), pages 281-312, September.
    10. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    11. Devarajan, Shantayanan & Swaroop, Vinaya & Heng-fu, Zou, 1996. "The composition of public expenditure and economic growth," Journal of Monetary Economics, Elsevier, vol. 37(2-3), pages 313-344, April.
    12. Isiaka Akande Raifu & Alarudeen Aminu & Abiodun O. Folawewo, 2020. "Investigating the relationship between changes in oil prices and unemployment rate in Nigeria: linear and nonlinear autoregressive distributed lag approaches," Future Business Journal, Springer, vol. 6(1), pages 1-18, December.
    13. Abdur Rauf & Maryyum Bashir & Kiran Asif & Sardar Fawad Saleem, 2018. "Impact of Health Expenditures on Labor Force Participation: Evidence from Pakistan," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 6(4), pages 419-427, December.
    14. Olawumi Abeni Osundina, 2020. "Sustainable development: Does improvement in education and health of women improve female labour force participation rate?," Sustainable Development, John Wiley & Sons, Ltd., vol. 28(1), pages 13-24, January.
    15. Daron Acemoglu & James Robinson, 2010. "The Role of Institutions in Growth and Development," Review of Economics and Institutions, Università di Perugia, vol. 1(2).
    16. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    17. John Anyanwu & Andrew E. O. Erhijakpor, 2009. "Health Expenditures and Health Outcomes in Africa," African Development Review, African Development Bank, vol. 21(2), pages 400-433.
    18. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
    19. David Powell & Seth Seabury, 2018. "Medical Care Spending and Labor Market Outcomes: Evidence from Workers' Compensation Reforms," American Economic Review, American Economic Association, vol. 108(10), pages 2995-3027, October.
    20. Abdelhafidh Dhrifi, 2020. "Public Health Expenditure and Child Mortality: Does Institutional Quality Matter?," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(2), pages 692-706, June.
    21. Abdur Rauf & Maryyum Bashir & Kiran Asif & Sardar Fawad Saleem, 2018. "Impact of Health Expenditures on Labor Force Participation: Evidence from Pakistan," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 6(4), pages 419-427.
    22. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    23. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    24. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    25. Lixin Cai & Guyonne Kalb, 2006. "Health status and labour force participation: evidence from Australia," Health Economics, John Wiley & Sons, Ltd., vol. 15(3), pages 241-261, March.
    26. Marwa Farag & A. Nandakumar & Stanley Wallack & Dominic Hodgkin & Gary Gaumer & Can Erbil, 2013. "Health expenditures, health outcomes and the role of good governance," International Journal of Health Economics and Management, Springer, vol. 13(1), pages 33-52, March.
    27. Tin Su & Subhash Pokhrel & Adjima Gbangou & Steffen Flessa, 2006. "Determinants of household health expenditure on western institutional health care," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 7(3), pages 195-203, September.
    28. David Bloom & David Canning, 2003. "The Health and Poverty of Nations: From theory to practice," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 4(1), pages 47-71.
    29. Steven Stern, 1989. "Measuring the Effect of Disability on Labor Force Participation," Journal of Human Resources, University of Wisconsin Press, vol. 24(3), pages 361-395.
    30. Cooray, Arusha & Dzhumashev, Ratbek, 2018. "The effect of corruption on labour market outcomes," Economic Modelling, Elsevier, vol. 74(C), pages 207-218.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hartwig, Jochen, 2014. "Testing the Uzawa–Lucas model with OECD data," Research in Economics, Elsevier, vol. 68(2), pages 144-156.
    2. Olaoye, Olumide O. & Eluwole, Oluwatosin O. & Ayesha, Aziz & Afolabi, Olugbenga O., 2020. "Government spending and economic growth in ECOWAS: An asymmetric analysis," The Journal of Economic Asymmetries, Elsevier, vol. 22(C).
    3. Jochen Hartwig, 2009. "A panel Granger-causality test of endogenous vs. exogenous growth," KOF Working papers 09-231, KOF Swiss Economic Institute, ETH Zurich.
    4. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    5. Gebregziabher, Fiseha & Niño-Zarazúa, Miguel, 2014. "Social spending and aggregate welfare in developing and transition economies," WIDER Working Paper Series 082, World Institute for Development Economic Research (UNU-WIDER).
    6. Michel Dumont, 2015. "Working Paper 05-15 - Evaluation of federal tax incentives for private R&D in Belgium: An update," Working Papers 1505, Federal Planning Bureau, Belgium.
    7. Simplice A. Asongu, 2023. "Mobile Phone Innovation and Doing Business in Sub-Saharan Africa," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 9(2), pages 238-269, July.
    8. Daniel Oto Peralías & Daniel Oto-Peralías & Diego Romero-Ávila, 2012. "Tracing the Link between Government Size and Growth: The Role of Public Sector Quality," EcoMod2012 4015, EcoMod.
    9. Asongu, Simplice A. & Nwachukwu, Jacinta C. & Orim, Stella-Maris I., 2018. "Mobile phones, institutional quality and entrepreneurship in Sub-Saharan Africa," Technological Forecasting and Social Change, Elsevier, vol. 131(C), pages 183-203.
    10. Castro, Vítor & Martins, Rodrigo, 2021. "Government ideology and economic freedom," Journal of Comparative Economics, Elsevier, vol. 49(1), pages 73-91.
    11. Hoolda Kim & Sophie Mitra, 2023. "Dynamics of Health and Labor Incomes in Korea," Fordham Economics Discussion Paper Series dp2023-01er:dp2023-01, Fordham University, Department of Economics.
    12. Kin Sibanda & Alungile Qoko & Dorcas Gonese, 2024. "Health Expenditure, Institutional Quality, and Under-Five Mortality in Sub-Saharan African Countries," IJERPH, MDPI, vol. 21(3), pages 1-23, March.
    13. Puruweti Siyakiya, 2017. "The Impact of Institutional Quality on Economic Performance: An Empirical Study of European Union 28 and Prospective Member Countries," World Journal of Applied Economics, WERI-World Economic Research Institute, vol. 3(2), pages 3-24, December.
    14. Njamen Kengdo Arsène Aurelien & Nchofoung Tii N. & Kos A Mougnol Alice, 2023. "Determinants of Military Spending in Africa: Do Institutions Matter?," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 29(4), pages 401-440, December.
    15. Slesman, Ly & Baharumshah, Ahmad Zubaidi & Ra'ees, Wahabuddin, 2015. "Institutional infrastructure and economic growth in member countries of the Organization of Islamic Cooperation (OIC)," Economic Modelling, Elsevier, vol. 51(C), pages 214-226.
    16. Asongu, Simplice & Biekpe, Nicholas, 2017. "Mobile Phone Innovation and Entrepreneurship in Sub-Saharan Africa," MPRA Paper 81703, University Library of Munich, Germany.
    17. Gnangnon, Sèna Kimm & Roberts, Michael, 2015. "Aid for trade, foreign direct investment and export upgrading in recipient countries," WTO Staff Working Papers ERSD-2015-10, World Trade Organization (WTO), Economic Research and Statistics Division.
    18. Fiseha Gebregziabher & Miguel Niño-Zarazúa, 2014. "Social Spending and Aggregate Welfare in Developing and Transition Economies," WIDER Working Paper Series wp-2014-082, World Institute for Development Economic Research (UNU-WIDER).
    19. Osvaldo Lagares, 2016. "Capital, Economic Growth and Relative Income Differences in Latin America," Discussion Papers 16/03, Department of Economics, University of York.
    20. Solomon, Edna Maeyen & van Klyton, Aaron, 2020. "The impact of digital technology usage on economic growth in Africa," Utilities Policy, Elsevier, vol. 67(C).

    More about this item

    Keywords

    Government health expenditure; Out-of-pocket health expenditure; Labor force participation; Institutional quality; Panel fixed effects; Two-stage system GMM;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jknowl:v:15:y:2024:i:1:d:10.1007_s13132-023-01318-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.