What is the relationship between the economy and the health of a population?
Different research has shown that a healthy population produces higher per capita income and a higher Gross domestic product; therefore, a country’s economic performance to its health performance. Wealthier countries are known to have a healthier population and reduced mortality rates. Healthier populations always are associated with higher saving rates due to serious planning for higher life expectancy. The research attempts to verify the following aspects of the economy and their impacts on health status.
First, if economic growth improves health and increases survival chances, the net effect on health is ambiguous as those who survive due to higher incomes might have lower health levels.
Second, whether rising incomes will increase population health might depend on the population’s distribution of gains. If only those in good health benefit, the effect on overall population health will be small. Related This is potentially an issue both within and between households. Third, the effect of additional income on health will depend on how different incomes spendings on goods and services have no or even a negative effect on health.
Finally, it could be that public health services and infrastructure play a decisive role. Without improvements in this area, the effect of economic growth on health status is negligible.
Economic growth, health spending, and outcomes to a population
Economic growth, in theory, enables governments to raise additional resources for public investments and expenditure, including public health. Higher individual incomes could also increase demand for the quantity and quality of public and private health services. However, outcomes will also depend on whether the government is responsive to popular demands and whether increased public health spending will improve health.
Economic growth and effects on malnutrition and mortality rates of a population
Firstly, the effects of short-run fluctuations in growth typically vary with a country’s stage of development. Health, particularly when operationalized as mortality rates, tends to be counter-cyclical in developed and pro-cyclical in developing countries. While changes in health behaviors are the main driver of counter-cyclicality in developed countries, these findings are also consistent with the literature on the cyclicality of public health expenditures that typically indicate that expenditure is counter-cyclical in developed and pro-cyclical in developing countries.
Secondly, the effect of shocks on permanent (lifetime) income is likely very different. The little evidence that exists suggests positive effects of an increase in permanent income on health outcomes. Third, how health outcomes are measured tends to matter. There is convincing empirical evidence for a positive effect of downturns on mortality rates in developing countries, while the case for an effect on nutritional outcomes changes is much weaker.
Effects of economic growth on the health of a society
There is a strong positive association between average income (or wealth) and indicators of population health status, which is evident across countries and countries. The explanations for this association can be manifold. One is that increasing incomes cause improved population health. But the relationship might also be a result of confounding variables that affect both incomes and health. Potential confounding factors are, among other things, the availability and use of advanced technologies, the population’s level of education, governance, and institutional quality, and individuals’ rate of time preference. This taste parameter determines the extent to which individuals make provisions for the future. It is also plausible that population health causes economic growth rather than only the other way around. There is a large and growing literature that investigates this reverse channel.