Government health spending in an endogenous growth model: An empirical study in China

This paper investigates the impact of government health spending on economic growth in the framework of Chinese economy. We develop an endogenous growth model that includes government health spending as an important health human capital investment. Using time series data from 1978–2009, the empirical result suggests that government health spending in China has a robust positive effect on economic growth with an elasticity of 0.472523 during this period, but the scale of this spending is still insufficient, which may restrict China's economic growth. Policy makers still have a lot to do to tap into the potential of government health spending with regard to its health human capital effect on economic growth.