The Role of Institutional Quality in Health Expenditure-Labor Force Participation Nexus in Africa

Olaide Sekinat Opeloyeru (), Temitope Olanike Faronbi () and Isiaka Raifu
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Olaide Sekinat Opeloyeru: Tai Solarin University of Education
Temitope Olanike Faronbi: University of Ibadan

Journal of the Knowledge Economy, 2024, vol. 15, issue 1, No 90, 2273 pages

Abstract: Abstract The study investigated the role of institutional quality in the relationship between health expenditure and labor force participation (LFP) in Africa, taking into consideration two forms of health expenditures (government health expenditure (GHE) and out-of-pocket health expenditure (OOPHE)) and gender labor force participation dichotomy. We employed data from 39 African countries for the period between 2000 and 2018 using Panel Fixed Effects with Driscoll and Kraay standard errors and a two-stage system Generalized Method of Moments (GMM). The results revealed that GHE yields an increasing effect on total, female, and male LFP. OOPHE, in most cases, leads to a decline in LFP. The institutional quality was found to be detrimental to LFP. The magnitude of the positive effect of GHE on LFP is reduced by the interaction of institutional quality with GHE. In conclusion, we advocate for the improvement in institutional apparatuses across African countries.

Keywords: Government health expenditure; Out-of-pocket health expenditure; Labor force participation; Institutional quality; Panel fixed effects; Two-stage system GMM (search for similar items in EconPapers)
JEL-codes: E62 H51 J21 O43 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s13132-023-01318-5

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