The relationship between health care expenditure and life expectancy at birth: Case of Turkey

The main objective of this study is to examine the relationships between health expenditures and life expectancy at birth in Turkey during the period 1980-2017. Earlier studies have demonstrated the positive relationship between health expenditures and life expectancy at birth. The Autoregressive Distributed Lag bounds test approach to co-integration and Error Correction Model were applied in order to investigate the long-run and short-run relationship between the dependent variable, life expectancy at birth and its determinants. As demonstrated in many previous studies, the Bounds test finding shows a long-run relationship between life expectancy at birth and health expenditures. The empirical results reveal that all independent variables (health care expenditure per capita, Gross Domestic Product per capita, and physicians per person) have a positive impact on life expectancy at birth while except GDP per capita (at 5 percent), all statically significant at 1 percent. However, the study found out that physicians per person has a statistically significant negative impact on life expectancy at birth in the short run. Likewise, unlike the long run, GDP per capita is statistically insignificant, with a negative coefficient, which implies the negative relationship between GDP per capita and life expectancy at birth. This study has also important policy recommendations. The findings of this study indicate that life expectancy can be improved significantly when the GDP per capita, HCE per capita, and physicians per person increases. Hence policymakers should strive to increase health expenditures and the number of physicians, which they believe are major drivers of the fundamental increase in life expectancy. This will contribute to the growth and development of the country's economy together with the improvement of public health.