Investigating Interactions among Health Care Indicators, Income Inequality and Economic Growth: A Case Study of Iran

Document Type : Research Article

Authors

1 Assistant Professor of Economic, Department of Economics, Faculty of Economics & Social Science, Bu-Ali Sian University, Hamedan, Iran

2 Associate Professor of Economic, Department of Economics, Faculty of Economics & Social Science, Bu-Ali Sian University, Hamedan, Iran

3 M.A. in Economics, Department of Economics, Faculty of Economics & Social Science, Bu-Ali Sian University, Hamedan, Iran

Abstract

Life expectancy and infant mortality are two major indicators for assessing the efficiency of every social health system. The bulk of literature on health economics is related to unilateral influences of macroeconomic variables on health sector indices and less attention has been paid to bilateral and simultaneous effects. Therefore, this paper aims to examine the bilateral and simultaneous impacts of the key macroeconomic variables on life expectancy and infant mortality in Iran during 1981-2018. To this end, by considering the government’s health care expenditures and GINI coefficient, a system of simultaneous equations based on variables of life expectancy, infant mortality and economic growth is developed. The findings indicated that income growth per capita affects the growth of life expectancy index positively by 31%, but the growth of social-class differences or income inequality has a negative effect on this index. Moreover, the escalation of health care budget in Iran has led to slumps in infant mortality rate by 83%. Such outcome exhibits the significant role of government, parliament and legislature in approving and improving the budget of the Ministry of Health and facilitating achievement of higher social-health standards. Finally, findings of present study reflected the simultaneous and positive effects of improving growth of life expectancy and reverse effect of infant mortality growth indices on the economic growth of Iran. The estimations provided evidence on the interactions between enhancing the macroeconomic conditions and improving the health economy indicators and existence of a reinforcing loop between them.

Keywords

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References

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Journal of Applied Economics Studies in Iran
Volume 10, Issue 38
June 2021
Pages 69-94

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