IMPACT OF HEALTH EXPENDITURE ON GDP,HDI,& UNEMPLOYMENT RATE IN ASEAN-7

ARTICLE

IMPACT OF HEALTH EXPENDITURE ON GDP,HDI AND UNEMPLOYMENT RATE IN ASEAN-7

BY   DR.DEBESH BHOWMIK

Published in INTERNATIONAL JOURNAL OF RESEARCH AND ANALYTICAL REVIEWS
SPECIAL ISSUE,JANUARY 2019,PAGE-184-197,ARTICLE NO-22.

There are 47 papers which were presented in the ICSSR sponsored International conference on "Emerging Socio-Economic Trends and Business Strategy" organised by International School of Business and Media,Kolkata during 18-19 January,2019.

IMPACT OF HEALTH EXPENDITURE ON GDP,HDI,& UNEMPLOYMENT RATE IN ASEAN-7

Abstract

In this paper author endeavours to relate the health expenditure of ASEAN-7 with GDP , HDI and unemployment rate of ASEAN-7 from 1990-2016 using panel data through the econometric models of fixed effect regression, panel cointegration and panel vector error correction model. The paper concludes that fixed effect panel regression among health expenditure % of GDP, HDI,unemployment rate and GDP of ASEAN-7 during 1990-2016 showed that one per cent increase in health expenditure per year led to 0.719% decrease in GDP per year but one per cent increase in HDI and unemployment rate per year led to step up 2.985% and 0.292% in GDP per year significantly.Johansen-Fisher panel cointegration confirmed that Trace and Max Eigen statistic showed two cointegrating equations where one cointegrating equation tends to equilibrium which implies that there is long run causality from GDP,HDI and unemployment rate of ASEAN-7 to the health expenditure as per cent of GDP during 1990-2016 where residuals VECM is stable,nonstationary,non-normal and serially correlated.Moreover,the Wald test suggests that there is short run causality running from health expenditure % of GDP of ASEAN-7 of previous periods to the change of GDP of ASEAN-7.

Key words : Health expenditure,human development index,unemployment rate,gross domestic product,fixed effect panel regression,cointegration,vector error correction,short run causality, long run causality.

JEL Classification code-C22,E24,F15,H15,I10,I18,J24,J64,O15,O40

VIII.Conclusions

The paper concludes that fixed effect panel regression among health expenditure % of GDP, Human Development Index, unemployment rate and GDP of ASEAN-7 during 1990-2016 showed that one per cent increase in health expenditure per year led to 0.719% decrease in GDP per year but one per cent increase in HDI and unemployment rate per year led to step up 2.985% and 0.292% in GDP per year significantly. Johansen-Fisher panel cointegration confirmed that Trace and Max Eigen statistic showed two cointegrating equations where one cointegrating equation tends to equilibrium which implies that there is long run causality from GDP,HDI and unemployment rate of ASEAN-7 to the health expenditure of ASEAN-7 as per cent of GDP during 1990-2016 where the residual test of  VECM is stable, nonstationary, non-normal and serially correlated. Moreover, the Wald test suggests that there is short run causality running from health expenditure % of GDP of ASEAN-7 of previous periods to the change of GDP of ASEAN-7.The paper also showed some limitations and discussed policy recommendations.