HomeAsia-Pacific Social Science Reviewvol. 8 no. 2 (2008)

Effect of Health Human Capital Expenditure on Economic Growth in India: A State Level Study

Sushil K. Haldar

Discipline: Social Science



There exists a wide range of variation of income, health expenditure, and health status across the 15 large states in India. The empirical validity of the theoretical model on income, health, and healthcare relationships is examined in India’s 15 large states considering a longitudinal data for 26 years (from 1980-81 to 2005-06). Causality is examined between socio-economic status of health, income, and health expenditure using Granger Causality tool. The results vary across the states. The findings on the impact of health on income, health and health expenditure, and health expenditure and income are examined in the light of bi-variate Granger causality tool. The analysis of the degree of interconnections is expected to contribute to a deeper understanding of the benefits of investing in health. This analysis may be significant for economic policymaking and may help contribute to socioeconomic development plan at the disaggregate level in India.