Abstract:

Given the importance of human health as human capital to the national economy, it is emphasized in numerous studies in the health economics literature that differences in healthcare expenditures are a significant determinant of economic growth. The significance of the topic provided as the driving force behind this study, which aimed to use an empirical method to assess the validity of the health-based growth hypothesis for the Turkish economy between 1975 and 2020. The nonlinear bounds test approach was employed to test for cointegration between economic growth and healthcare expenditures, and the non-normally distributed autoregressive distributed lag approach (NARDL) modeling technique was applied to investigate cointegration. The study’s findings show that a 1% rise in per capita healthcare expenditure increases per capita gross domestic product (GDP) by 0.55%, whereas GDP per capita declines by 0.26% in response to a negative shock of 1%. The MSR model was used to assess the robustness of the NARDL model results, and the results appear to be similar. The validity of the health-based growth hypothesis was established in Turkey over the time period taken into account based on the conclusions drawn from the analyses.