Health, education and the dynamics of cross-country productivity differences

Abstract

In this article, we study the impact of health and education on the growth rate of total factor productivity (TFP) in a sample of 97 countries for the period 1960 to 2005. We find that both health and education have a positive and significant effect on GRTFP. The result that health has a positive effect on GRTFP is new to the literature. The result suggests that in designing policies which facilitate technology diffusion we need to broaden the concept of human capital to include health.

Keywords:

• augmented Solow growth model
• productivity
• TFP growth
• health
• education

JEL Classification:

• F43
• E23
• N10
• N30
• O47

Acknowledgements

This research was supported by the SSHRC (Canada). We thank Stephen Hume for his editorial assistance on an earlier version of the article.

Notes

¹ An expanded version of the article is available at http://web.uvic.ca/kumara/growth1.pdf.

² See the discussion of the appropriateness of other methods in the expanded version of the article available at http://web.uvic.ca/kumara/grwoth1.pdf.