THE IMPACT OF HEALTH STATUS ON ECONOMIC GROWTH IN SRI LANKA

Abstract

Health can be considered as a factor of economic growth. In Sri Lanka, the government is primarily responsible for health care. As a result, residents in Sri Lanka have access to free health care. The aim of this study is to examine how health stats impacts on economic growth in Sri Lanka. As health indicators, the study used government health spending as a percentage of GDP, life expectancy from birth (years), and mortality rate (per 1,000 live births). As a proxy for economic growth, the Gross Domestic Product per capita has been used. All the selected variables’ data are available from 1960 in Sri Lanka. Therefore, the data was gathered over the period from 1960 to 2019.To determine the impact of independent factors on economic growth in Sri Lanka, this study used the Augmented Dickey Fuller (ADF) unit root test method, the Akaike Information Criterion (AIC), and multiple regression analysis. To study the causation between variables, the Granger Causality approach was applied. According to the study results, multiple regression analysis reveals that trade openness has a favorable impact on economic growth in Sri Lanka, whereas mortality rate has a negative impact. Granger causality studies revealed that GDP and health expenditure had a bidirectional causal relationship. Life expectancy and GDP, mortality rate and GDP, health expenditure and trade, health spending and life expectancy, health expenditure and mortality, life expectancy and trade, and life expectancy and mortality all have a unidirectional relationship.