Health and Economic Growth: Reconciling the Micro and Macro Evidence

Working Paper No. 26003 Economists use micro-based and macro-based approaches to assess the effects of health on economic growth. The micro-based approach tends to find smaller effects than the macro-based approach, thus presenting a micro-macro puzzle regarding the economic return on health. We rec...

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Bibliographic Details
Published inNBER Working Paper Series p. 26003
Format Paper
LanguageEnglish
Published Cambridge National Bureau of Economic Research, Inc 01.06.2019
Subjects
Aggregates
Economic development
Economic growth
Economic indicators
Economic models
Economic theory
Education
Estimates
Fertility
GDP
Gross Domestic Product
Human capital
Labor productivity
Macroeconomics
Population
Production functions
Public health
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Summary:Working Paper No. 26003 Economists use micro-based and macro-based approaches to assess the effects of health on economic growth. The micro-based approach tends to find smaller effects than the macro-based approach, thus presenting a micro-macro puzzle regarding the economic return on health. We reconcile these two strands of literature by showing that the point estimate of the macroeconomic effect of health is quantitatively close to that found by aggregating the microeconomic effects, when carefully specifying the estimation equations and controlling for spillovers of health at the aggregate level. Our results justify using the micro-based approach to estimate the direct economic benefits of health interventions.
ISSN:0898-2937
DOI:10.3386/w26003