The impact of health status on economic growth in Botswana – a simultaneous model approach

Abstract

Human capital most especially health status has been gaining traction as an economic engine in economic growth whereby it is both an input and output of economic growth. Growth models using health variables do state the existing endogeneity and so far have either ignored or used econometric procedures to account for it. This study makes use of the Kaldor-Verdoorn law to capture the endogeneity along with the augmented Solow growth model, solves the two as a system of equations using 2SLS regression. The study is conducted between the period 1975 and 2015. The resulting growth equation yielded life expectancy and under-5 mortality as significant health variables in determining economic growth. Both have a negative relationship to economic growth which for life expectancy goes against economic theory. However, this is due to specific underlying factors affecting the country.