The effectiveness of public health expenditures in OECD countries

Health is essential to achieve sustainable development (SD) and the Millennium Development Goals (MDGs). It is not possible to achieve SD without health. The main purpose of this study is examining the effectiveness of public health expenditure on health outcomes by estimating health production function for 20 selected Organization for Economic Co-operation and Development (OECD) countries in the period 1980 and 2015. In this research, infant mortality rate, under-5 mortality rate and life expectancy at birth were chosen as health outcomes and panel data analysis was used. The data was sourced from World Bank data base and OECD data base. The results are approximately similar with the literature. There is a positive relationship between life expectancy at birth and public health expenditure. On the other hand, there is a negative relationship between public health expenditure and infant mortality rate and under-5 mortality rate. The elasticity rate of public health expenditure for infant mortality rate, under-5 mortality rate and life expectancy at birth are -0.32, -0.36 and 0.04, respectively. According to these results it can be said that, increase in public health expenditure improves health outcomes (infant mortality rate, under-5 mortality rate and life expectancy at birth).