The impact of health on economic growth: A narrative literature review

Abstract

The nexus between health and economic growth is a dynamic and complex relationship. This article reviews the empirical evidence that has sought to assess the causal impact of health on growth, understood as growth in GDP per capita, and focusing on cross-country and selected single country studies. The review largely provides evidence in favour of a positive effect of population health on economic growth. However, the multitude of the factors at play and the possible bidirectional relationship between health and growth pose a challenge for the quantification of the effect and for the relative importance of the underlying mechanisms. There is notable heterogeneity between studies in the magnitude and, in some cases, even in the sign of the effect. The evidence suggests that the health-growth relationship may depend on three main factors: the sample composition (i.e. a country's demographic stage or GDP per capita); the health dimension considered (e.g. health improvements at different life stages may affect productivity differently); and the model specification (e.g. whether or not initial life expectancy is controlled for in the analysis or the quality of the instrument). These findings advocate for a policy approach that integrates health considerations into economic strategies and emphasizes intersectoral collaboration to maximize the economic returns from improved health outcomes.