Impacts of health condition on economic growth in the 1990s: an analysis for the Brazilian states

Kenya V. Noronha, Centro de Desenvolvimento e Planejamento Regional (CEDEPLAR)
Lízia Figueirêdo, Pontifícia Universidade Católica de Minas Gerais
Monica V. Andrade, Centro de Desenvolvimento e Planejamento Regional (CEDEPLAR)

This paper aims to test the relationship between health and per capita economic growth. Two main causalities were discussed: if health would directly increase labour productivity or if it would, indirectly, intensify the positive effect of education on growth. A better health status could decrease the depreciation of human capital, proxied by education. We run two basic specifications: the first one include the mortality rate as the proxy for health together with traditional variables usually discussed in the economic growth literature; the second one include interaction terms to capture the indirect effects of health. Our main results indicate that health spurs growth specially trough the indirect effect on economic growth.