The effect of health on economic growth: A production function approach for Turkey

Economic growth has attracted the attention of economists throughout history. However, until the Augmented Neo-Classical Growth Model developed by Mankiw, Romer and Weil, growth theories ignored the human capital factor. This study aims to investigate the impact of health on economic growth in Turkey for the period 1960-2014 through a production function that includes human capital. In addition to health, education is also included in the production function as the other main component of human capital. Life expectancy at birth used to represent health variable and the number of students per teacher used to represent education variable. As the focus of the study is economic growth, education that increases the quality and productivity of labor is gaining importance. For this reason, to represent the education part of human capital; the number of students per teacher in vocational and technical secondary education and the number of students per lecturer in tertiary education are used. Multivariate Autoregressive Distributed Lag (ARDL) Bounds Test is chosen as the method in empirical analysis. As a result, a significant long-term cointegration relationship is found between the variables. Results also shows that; a 1% increase in life expectancy at birth leads approximately a 0,67% increase in gross domestic product, a 1% increase in number of students per teacher in vocational and technical secondary education leads approximately a 0,21% decrease in gross domestic product, a 1% increase in number of students per teacher in tertiary education leads approximately a 0,21% in gross domestic product.