Health as Factor of Economic Growth: the Estonian Case

Helje Kaldaru (), Kaie Kerem () and Andres Võrk ()
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Helje Kaldaru: Department of Economics, University of Tartu
Kaie Kerem: Department of Economics at Tallinn University of Technology
Andres Võrk: Department of Economics, University of Tartu

No 110, Working Papers from School of Economics and Business Administration, Tallinn University of Technology

Abstract: The aim of the paper is to analyze the relationship between health and economic growth in Estonia. Health determines the quality of the human capital, which modern economic theories consider the principal factor of economic growth. On the basis of survey data we estimate the effect of self-assessed health on labor supply and wages applying econometric methods. We find that poor health is significantly related to lower wages and employment probability. We also calculate average days and hours lost from work due to ill health or injury in 2001. The plausible direct loss in GDP due to health problems is about 1-2 per cent. We conclude that although health has had overall a marginal effect on economic growth during the transition period, it is still important and its impact may increase in the future, when the population’s health capital deteriorates further as a result of the population getting older and young generations having damaging health behavior.

Keywords: health; economic growth (search for similar items in EconPapers)
JEL-codes: I10 F43 (search for similar items in EconPapers)
Date: 2004
Note: This research was conducted with support from the Estonian Science Foundation (Research Grants 5369 and 5083).
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Published in Working Papers in Economics.School of Economics and Business Administration,Tallinn University of Technology (TUTWPE), Pages 103-116

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