Analysis of the impact of health sector spending on macroeconomic indicators: An analysis on 5 leading european countries and Turkey

The importance of human health in the development and progress of society are undeniable. Considering that health is mostly of a public nature, societies will raise a healthy generation, the level of consciousness will increase, and the level of well-being will also increase with the emphasis on and protection of the health of individuals. Apart from the physical health mentioned in WHO, environmental and mental health should dec be ignored. At this point, the improvement and improvement of health is the largest capital of the countries. All of these investments made to the individual go through health expenditures. In this study, the effect of health expenditures on macroeconomic indicators was analyzed. The countries included in the study, Turkey and the 5 countries with the highest Gross Domestic Product in 2019 that make up the European Union; Germany, France, the Netherlands, Spain and Italy were selected. Data on macroeconomic indicators of selected countries covering the year 1992-2019 are taken from the World Bank and OECD Stat. The share of health expenditure in GDP(SH), with macroeconomic indicators, unemployment (ISS), employment rate (ISKO), gross domestic product (GSYIH), gross domestic product per capita (KBGSYIH), growth rate (BUO), Consumer Price Index (TUFE), Industrial Production Index (SUE) the relationship of the variables was investigated by panel data analysis method. The tests used in econometric analysis are Stationarity Analysis, Cross-Sectional Dependence Test, AMG Estimator and Toda-Yamamoto Causality Analysis. First of all, 8 variables in the panel are rootless. The cross-sectional dependence and homogeneity of the variables were examined. A total of 7 models were established with macroeconomic variables. The effects of funds allocated to health on the variables were examined through these models. Fixed effects and random effects model estimations were made for 7 models created with the help of the Hausman Test. Finally, the direction of the relationship between the variables was evaluated by applying the Toda-Yamamoto Causality test. With health expenditures; Bilateral causality between gross domestic product, gross domestic product per capita and growth rate was determined. Unilateral causality was found between industrial production index, CPI, unemployment, labor force participation rate and health expenditures. The slope coefficients of long-term co-acting variables are interpreted with the AMG forecaster. In the light of the findings obtained from the study, it is possible to say that the most affected variable by the increase in health expenditures in 6 countries, including Turkey, is gross domestic product and is negatively affected.