Health Investments and Economic Growth: Macroeconomic Evidence and Microeconomic Foundations

Improvements in health status over the last 50 to 100 years have been nothing short of spectacular. Vaccines, antibiotics, and other pharmaceutical developments have drastically reduced the incidence of illness and death. Economic growth has also helped: richer people are better nourished and educated, and richer countries are more able to afford the public goods (such as supply of clean water and sanitation and control of disease vectors such as mosquitoes) that reduce the transmission of disease.

Do improvements in health themselves help to boost economic growth? A resolution of this debate could boost the urgency of the quest for growth, inform that quest, or both. For example, a finding that economic growth reduces infant mortality could hasten the adoption of potentially growth-enhancing policy reforms. To help inform decision making on public policy, this review aims to: i) examine the routes by which improvements in health might indeed increase incomes and growth, and the related evidences; and ii) investigate the determinants of health itself, particularly evidence on the impact of public expenditure policies on health.