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The impact of health sector on R&D, economic growth and wages

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  • Oscar Afonso
  • Ana Sarabanda

Abstract

We extend the existing R&D growth literature by focusing on the short-, medium-, long-run effects of the health sector on R&D intensity, economic growth and wages, and by considering 21 OECD countries between 1991 and 2008. We show that: (i) there is a unique and stable steady state; (ii) an increase in health-labour share in skilled population has no effect on growth, but affects negatively (positively) the R&D intensity (the skill premium); (iii) Anglo--Saxons countries have the lowest health-labour share in skilled-labour population, and Nordic countries have the lowest skill premium and the highest consumption/production of healthcare per capita .

Suggested Citation

  • Oscar Afonso & Ana Sarabanda, 2016. "The impact of health sector on R&D, economic growth and wages," Applied Economics Letters, Taylor & Francis Journals, vol. 23(14), pages 1006-1011, September.
    • Handle: RePEc:taf:apeclt:v:23:y:2016:i:14:p:1006-1011
    DOI: 10.1080/13504851.2015.1128069
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    1. Matthew D. Shapiro & Christopher L. House, 2006. "Phased-In Tax Cuts and Economic Activity," American Economic Review, American Economic Association, vol. 96(5), pages 1835-1849, December.
    2. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    3. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-784, August.
    4. van Zon, Adriaan & Muysken, Joan, 2001. "Health and endogenous growth," Journal of Health Economics, Elsevier, vol. 20(2), pages 169-185, March.
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    Cited by:

    1. N.M. Odhiambo, 2021. "Health Expenditure and Economic Growth in Sub-Saharan Africa: An Empirical Investigation," Working Papers AESRI-2021-05, African Economic and Social Research Institute (AESRI), revised Jan 2021.
    2. Nicholas M. Odhiambo, "undated". "Health Expenditure and Economic Growth in sub-Saharan Africa: An Empirical Investigation," Working Papers AESRIWP05, African Economic and Social Research Institute (AESRI).
    3. Mahmoud M. SABRA, 2022. "Health expenditure, life expectancy, fertility rate, CO2 emissions and economic growth Do public, private and external health expenditure matter?," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(3(632), A), pages 89-102, Autumn.

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