The Causal Links Among Economic Growth, Education and Health: Evidence from Developed and Developing Countries

Abstract

This paper attempts to answer the question: How does higher education and improved health contribute to economic growth? For this purpose, the causal relationship among health, education and economic growth is analysed using simultaneous equations models on a sample composed of 108 developed and developing countries with data spanning the period 1990–2017. Results indicate bidirectional causality between health and economic growth in low- and middle-income countries, while unidirectional causality running from economic growth to health is supported in high-income countries. A bidirectional causal relationship between education and economic growth appears in all groups of countries. For the nexus among health and education, results show bidirectional causality in middle- and high-income countries and a unidirectional causality running from education to health in low-income ones.