ON THE RELATIONSHIP BETWEEN HEALTH CAPITAL AND THE ECONOMIC GROWTH IN RUSSIAN REGIONS (2013-2018)

Abstract

In the past few years, in the Russian economy and politics, an understanding has been reached that the health of the population is one of the drivers of economic development. At the same time, there is a shortage of work in the economic literature that investigates the relationship between health capital, health care costs and economic growth; there is no generally accepted model in economic theory that explains the relationship between these variables and is supported by empirical tests for individual countries and regions. This study is intended to fill this gap; its goal is to quantify the impact of health capital and health care costs on Russian regions' economic growth in 2013-2018 within the economic growth model with endogenous technological progress. The authors constructed two specifications of the Arellano-Bond model for the dependent variable “rate of growth of per capita GRP”. The simulation results allow us to conclude that the accumulation of health capital leads to an increase in economic growth in the Russian Federation regions. Simultaneously, an increase in government spending on health care at a fixed level of health capital did not result in 2013-2018. to an increase in the growth rate of per capita GRP. This fact can be explained by a number of factors. We can name the general focus of the PHE on maintaining a favorable epidemiological situation and the industry's infrastructure not directly related to individual health, a possible insufficient level of human capital accumulation in the regions. Future research by the authors will focus on assessing the impact of health capital and health care costs in an extended model to include the level of human capital stock.