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Health investment, health outcomes and economic growth in China: an applied macroeconomic analysis

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posted on 06.02.2017, 06:11 authored by Chen, Gang
Health is regarded as an important dimension of human development and its crucial role as human capital has been long recognised; however, the strategic role of health investment remains undervalued in less developed regions. China is a very good example of this. Along with the economic transition in the past three decades, China’s health care system has also undergone several major changes. A key policy change was a shift of the main responsibility of health care finance to the individual in the early 1990s and a reversal of this in the early 2000s after the SARS epidemic. Possibly as a result of this, the population’s health status is reported to be performing below its potential. This thesis conducts a thorough empirical investigation of the various and varied relationships between health investment, health outcomes and economic growth in China, using publicly available macro data; thus it makes a significant contribution to the academic literature, as well as provides evidence for policy-makers in both China and other countries in transition. More specifically, this thesis empirically studies (1) the long-run relationship between health investment and economic output; and (2) the short-run nexus between health expenditure behaviours, health status and economic fluctuations, through both national time series and provincial-level panel data from mainland China. Overall, the results suggest that health investment has a significant and positive role in explaining the level of economic output in the long-run; and an estimated stronger effect in inland China may further highlight diminishing returns in health investment. The short-run results also suggest a significantly pro-cyclical movement of government health expenditure with economic growth. Furthermore, child health outcomes and infectious disease incidence are also significantly associated with economic fluctuations.


Campus location


Principal supervisor

Paula Lorgelly

Year of Award


Department, School or Centre

Centre for Health Economics


Doctor of Philosophy

Degree Type



Faculty of Business and Economics