The Effects of Government Expenditure on health care on Factor productivity : a regional approach
Subject Areas : Applied Economics
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Keywords: Factor Productivity, Public Health Investment, Pool data, Regional Approach,
Abstract :
This paper examines the impact of government expenditures on public health and its subsequent economic changes in Iran. This study is using a panel data of 28 provinces in Iran from 1379-89 to recognize triggering changes in labor productivity. The results indicate that government expenditure on wages and salaries; expenditures on consumables; drugs for health service; bandages and so on have positive and lasting effects on labor productivity. However, government investments for infrastructure such as building of a new hospital do not show any significant effect on labor productivity. It is surprising to realize that for the period of our study; only 6.3% of economic growth was due to capital expenditure whereas the effect of current expenditure was 20 fold higher.
