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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
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    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

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