Health-led growth hypothesis and health financing systems: an econometric synthesis for OECD countries

Abstract

Introduction: This study investigates the Health-Led Growth Hypothesis (HLGH) within OECD countries, examining how health expenditures influence economic growth and the role of different health financing systems in this relationship. Methods: Utilizing a comprehensive analysis spanning 2000 to 2019 across 38 OECD countries, advanced econometric methodologies were employed. Both second-generation panel data estimators (Dynamic CCEMG, CS-ARDL, AMG) and first-generation models (Panel ARDL with PMG, FMOLS, DOLS) were utilized to test the hypothesis. Results: The findings confirm the positive impact of health expenditures on economic growth, supporting the HLGH. Significant disparities were observed in the ability of health expenditures to stimulate economic growth across different health financing systems, including the Bismarck, Beveridge, Private Health Insurance, and System in Transition models. Discussion: This study enriches the ongoing academic dialog by providing an exhaustive analysis of the relationship between health expenditures and economic growth. It offers valuable insights for policymakers on how to optimize health investments to enhance economic development, considering the varying effects of different health financing frameworks.