Policy Effect of Health on Economic Growth in Ghana

Abstract

The study analyzed the policy effect of health on economic growth in Ghana from 1980 to 2014. This current study focused its discourse mainly on Health of Ghanaians in the fullness of time and its time order effect on individual income, educational attainment, demographic trends, and the nation’s aggregate level of economic growth. Development is seen as a consequence of good health of countries human assets. The study employed life expectancy at birth as an indicator of health, and real per capita GDP as an indicator of economic growth.  Autoregressive Distributed Lagged Model (ARDL) was employed in the study to test bounds approach to co-integration, by analytically controlling the effect of education, inflation, and accumulation of physical capital. The study revealed that economic growth is significantly predicted by health in the short-run. This implies that improvement in health status of the population will result in an increase in an economy’s level of output through labor augmentation. The study recommended that the government and the Ministry of Health in their capacities should enact and implement developmental policies in order to shape and develop the health sector so as to strengthen the healthcare system.

Keywords: Health, Economic Growth, Inflation, GDP, Healthcare and Health Status