Question

True, False or Uncertain: Improvements in the health status of the population of a developing country will typically result in higher average income. Explain your answer.

Answer 1

There exists a positive correlation between the average income and population health status of any economy . This is evident across countries and within the country. . Now talking about the developing country we know is a country with less developed industrial base and low HDI (Human development Index) relative to other countries of the world. Further if we talk about the relation ship between the health status of population in developing country and the income , till today many studies have been conducted by different writers have provided their views on it..

Rajesh kumar & Nalraj (2014) investigated the relationship between health care expenditure and economic growth in the four of Indian states in 2010 and found that the expenditure made in health and its impact on economic  growth to be co-integrated in all the four states under study  . Unidirectional causality from health expenditure to economic growth in all four states was also found. Gangal and Gupta (2013)also have examined the effect of public expenditure on economic growth in India between 1998 to 2012.. The study found an unidirectional relationship that exists between the total public expenditure on  national income . Similarly many more studies have been conducted and most of the results were unidirectional

Basically if we say that the country is underdeveloped that means that the country needs a improvement in the  HDI and other other areas .if we examine we will find that the public expenditure made on health  in such countries will play an important role towards their development as it will increase their real income and health status which will further make the people more physically fit to work and earn thereby. but this cannot be possible in the short run but yes  this will bring  a positive impact in the long run. the simple reason is that the health care facility in any country will improve life span and earning capabilities and at the same time the government spending on health care would bring a spillover effects in terms of increasing per capita income.

Conclusion : It is a known fact that the richer countries in the world have higher quality of life than the poorer countries . We also know that the quality of health and health services in these richer countries are also better as such one can argue that there exists a positive relationship between percapita income and health expenditure. . However when taking into consideration the population increase, then the expenditure made on the health will give a better picture on country's per capita  income raise.