Vicious Circle of Health Expenditure: Time Series Evidence from Pakistan

Abstract

Healthy workers determine the economic growth of a nation like Pakistan. Without healthy workers, nations never gain high productivity. In this study, the term ‘Vicious Circle of Health Expenditure" was used. The "vicious circle of health" is a concept that defines a self-reinforcing cycle of deprived health leading to additional negative health consequences and social shortcomings and disadvantages. The major objective of this study, to find, how and why Pakistani workers’ productivity low than many developing countries. For this purpose, we used five variables: health expenditure is dependent, while GDP per capita, employment, education expenditure, and trade are independent variables. Time series data was used, and the data range was 1972-2021. The econometric technique ARDL is used for long-run association. Therefore, the current study finds, mostly significant results. Pakistan GDP per capita and employment are statistically significant and have a positive impact on health expenditure. While education expenditure and trade have a statistically negative impact on health expenditure, Therefore, a statistically significant and negative coefficient (-0.98) indicates the short-run equilibrium converges to the long-run equilibrium. The study suggests, government of Pakistan increase the health budget as well as improve access to healthcare and enhance social support systems.