The relationship between economic growth and health expenditure under structural breaks in Turkey

All societies and countries struggle to sustain their existence in the world in the face of instant events such as global economic crises, policy changes, and natural disasters. Regardless of the level of development of societies, the quality and diversity of health services play a key role in the struggle for their survival since their advent because a desired strong, happy and stable society can only emerge from having healthy individuals. However, the limitations in the health sector make it impossible to establish a health policy that can rapidly respond to access to health services in any country in the world. These limitations in the health market drew attention to the importance of economists and health administrators, and also brought up the issues of making the selections correctly with scarce resources, controlling the increasing health expenditures, keeping them under control and ensuring the cost-effective use of public resources once again during the period of Covid-19 pandemic. In creating an effective health system at the global and national context, Turkey made adjustments that is sustainable, improving and equivalent of the socio-economic characteristics of the country through Health Transformation Program in 2003. This program, which was designed in a gradual and continuous cycle for a regular course of health policies, was intended to increase the economic and health status of the healthcare services by providing efficient, effective individuals and health services with a high quality, continuous and sufficient funding. When the health expenditures spent for the continuity of the life and economic activities of individuals or societies progress in a positive direction, they give expected positive results in the life span and quality of the society. Accordingly, the purpose of this study is to deal with relationship between health expenditures and economic growth in Turkey. In the study, 1980-2018 periods were taken as basis. In addition to traditional unit root tests, unit root tests based on structural breakage have been applied in the study. In the study, while ADF and PP tests from the traditional unit root tests were applied, Zivot Andrews unit root test and Lee and Strazicich (2003) unit root test, which are based on structural breakage, were applied. In addition, the existence of a relationship between variables was tested by Engle and Granger (1987) and Gregory and Hansen Cointegration, which are cointegration tests based on structural breakage. According to the results of Gregory and Hansen Co-integration Test, it was concluded that there is a long-term co-integration relationship on health spending and economic growth, that is, health is effective on economic growth, while it was found that there is no long-term relationship between variables in the Engle Granger Causality Test. It can be seen from the results obtained in the study that in the case of structural breakage, econometric findings obtained through traditional methods may cause errors in the results.