Autumn                   Back to the articles list | Back to browse issues page

XML Persian Abstract Print

Threshold Effect of Aging Labor Force and Public Health Expenditures on Labor Force Productivity in MENA Countries
Seyed Kamal Sadrghi *1 , Ali Talib Hussein Al-Saadi2
1- University of Tabriz , sadeghiseyedkamal@gmail.com
2- University of Tabriz
Abstract:   (151 Views)
Nowadays, improving productivity, as the most important factor affecting economic growth, has become one of the basic concerns of policymakers. Considering the importance of productivity on the one hand, and the important role of the age composition of labor force and health expenditures on it, on the other hand, this study aims to investigate the relationship between government health expenditures and labor productivity, taking into account the threshold effects of aging labor force participation rate in MENA countries during 2000-2023 applying threshold dynamic and static regression method of panel data. The results show that labor productivity of the previous year has a positive and significant effect on current productivity. Moreover, when old labor force participation rate is lower than 14.40, health spending does not have a significant effect on the productivity, but in the conditions where old labor force participation rate is more than 14.40, health spending has a positive and significant relationship with productivity. Also, based on the results, the variables of FDI and ICT have positive and significant effects, and education and trade openness have negative and significant relationships with labor productivity.
 
Keywords: Labor Productivity, Threshold Regression Method, Old Labor Participation Rate.
     
Type of Study: Research | Subject: health, education, welfare economics
Received: Aug 22 2024 | Accepted: Nov 10 2024
References
1. Aiyar, S., Ebeke, C., and shao, X. (2016). The Impact of Workforce Aging on European Productivity. IMF Working Paper, WP/16/238. [https://www.imf.org/external/pubs/ft/wp/2016/wp16238.pdf] [DOI:10.5089/9781475559729.001]
2. Alavi, F. S., and Dehmardeh, N. (2021). Impact of Foreign Direct Investment on Productivity Growth with Emphasis on Human Capital and Institutional Quality in Iran: An Application of Wavelet Analysis. Journal of Investment Knowledge, Vol.10 (38), pp. 343-367. [URL:https://sanad.iau.ir/en/Journal/jik/Article/842197/FullText (in Persian)]
3. Almasi, M., Sohaili, K., Rostami, E., and Hemmati Dinarvand, E. (2019). The Effect of Health Expenditure on Labor Productivity in Iran in 2005 -2013. Occupational Hygiene and Health Promotion, Vol. 2 (4), pp. 304-319. [URL: http://ohhp.ssu.ac.ir/article-1-115-fa.html (In Persian)]
4. Amini, A., and Hejazi Azad, Z. (2007). An Analysis and Assessment of Health Contribution to Increasing Labor Productivity: A Case Study of Iran. Iranian Journal of Economic Research, Vol. 9 (30), pp. 137-163. [URL:https://ijer.atu.ac.ir/article_3652.html (In Persian)]
5. Asadpour, A. A. (2020). The Effect of Trade Openness, Exchange Relation and Human Capital on Total Productivity of Production Factors in Iran. Economic Growth and Development Research, Vol. 10(40), pp. 122-109. [doi: 10.30473/egdr.2019.47618.5291 (In Persian)]
6. Asgari, H., and Badpa, B. (2015). The Effects of Public and Private Health Care Expenditure on Health Status in Iran. Journal of Ilam University of Medical Sciences. Vol. 23 (5), pp. 36-46. [URL: http://sjimu.medilam.ac.ir/article-1-2346-fa.html (In Persian)]
7. Azvaji, A., Assari, A., Mahdavi, V., Jahangard, E., and Keshavarz, H. (2018). Empirical Examining of the Effects of Human Capital Components on Labor Productivity in the Services Sector; Evidence based on Quantile Regression (QR). Qjerp, Vol. 26 (87), pp. 149-182. URL: [http://qjerp.ir/article-1-2075-fa.html (In Persian)]
8. Baltabaev, B (2014). FDI and Total Factor Productivity Growth: New Macro Evidence. World Econ, Vol. 37 (2), pp. 311-334. [DOI:10.1111/twec.12115]
9. Börsch-Supan, A., and Weiss, M. (2016). Productivity and Age: Evidence from Work Teams at the Assembly Line. Journal of Economic Ageing, Vol. 7, pp. 30-42. [DOI:10.1016/j.jeoa.2015.12.001]
10. Burtless, G. (2013). The Impact of Population Aging and Delayed Retirement on Workforce Productivity. Working Paper, Center for Retirement Research, Boston College, wp2013-11. [https://crr.bc.edu/wp-content/uploads/2013/05/wp_2013-111.pdf] [DOI:10.2139/ssrn.2275023]
11. Calvo-Sotomayor, I., Paul Laka, J., and Aguado, R. (2019). Workforce Ageing and Labour Productivity in Europe. Sustainability, Vol. 11, 5851, [DOI:10.3390/su11205851]
12. Chevalier, A., Harmon, C., Walker, I., and Zhu, Y (2004). Does Education Raise Productivity, or Just Reflect it? The Economic Journal, Vol. 114 (499), pp. 499-517. [DOI:10.1111/j.1468-0297.2004.00256.x]
13. Combary, O., and Traore, S. (2021). Impacts of Health Services on Agricultural Labor Productivity of Rural Households in Burkina Faso. Agricultural and Resource Economics Review, Vol. 50 (1), pp. 150-169. [DOI:10.1017/age.2020.19]
14. Cylus, J., al Tayara, L. (2021). Health, an Ageing Labour Force, and the Economy: Does Health Moderate the Relationship between Population Age Structure and Economic Growth? Social Science Med, Vol. 287, [DOI:10.1016/j.socscimed.2021.114353] [PMID] []
15. Ehsani, Z., Dashtban Farouji, M., Khoshnoodi, A., and Dashtban Farouji, S. (2023). Investigating the Asymmetric Effect of Foreign Direct Investment and Government Health Expenditure on Population Health in Iran. Stable Economy Journal, Vol. 4(2), pp. 146-173. (In Persian) [doi: 10.22111/sedj.2023.45946.1357]
16. Emamverdi, G., and Boland-Ghamat, Z. (2019). Threshold and Asymmetric Effect of Foreign Direct Investment (FDI) on Economic Growth in Selected Countries of OPEC and OECD. Planning and Budgeting. Vol. 23 (4), pp. 113-135. (In Persian) [URL: http://jpbud.ir/article-1-1752-fa.html]
17. Eshkevarjiri, T., Alipour, M. S., and Gholami, E. (2017). The Effect of Aging on Economic Growth by Using Regional Accounts. Journal of Population Association of Iran, Vol. 11 (22), pp. 138-155. (In Persian) [DOR: 20.1001.1.1735000.1395.11.22.5.5]
18. Follmi, R., Fuest, A., An de Meulen, P., Micheli, M., Schmidt, T., and Zwick, L. (2018). Openness and Productivity of the Swiss Economy. Swiss Journal of Economics and Statistics, Vol. 154 (1), 17. [DOI:10.1186/s41937-018-0021-3] [PMID] []
19. Grossman, M. (1972). On the Concept of Health Capital and the Demand for Health. Journal of Political Economics, Vol. 80 (2), pp. 223-255. [DOI:10.1086/259880]
20. Hansen, A. H. (1938). The Consequences of Reducing Expenditures. Proceedings of the Academy of Political Science, Vol. 17 (4), pp. 60-72. [DOI:10.2307/1172352]
21. Hansen, B. E. (1999). Threshold Effects in Non-Dynamic Panels: Estimation, Testing, and Inference. Journal of Econometrics, Vol. 93 (2), pp. 345-368. [DOI:10.1016/S0304-4076(99)00025-1]
22. Hansen, B. E. (2000). Sample Splitting and Threshold Estimation. Econometrica, Vol. 68 (3), pp. 575-603. [DOI:10.1111/1468-0262.00124]
23. Hasanzadeh, M., Farhang, A., and Mohammadpour, A. (2021). The Effect of Population Aging on Economic Growth (Study of MENAP Member Countries). Journal of Population Association of Iran, Vol. 16 (31), pp. 217-247. (In Persian) [doi: 10.22034/jpai.2022.526835.1178]
24. Herzer, D., and Donaubauer, J. (2018). The Long-Run Effect of Foreign Direct Investment on Total Factor Productivity in Developing Countries: A Panel Cointegration Analysis. Empirical Economics, Vol. 54 (2), pp. 309-342. [DOI:10.1007/s00181-016-1206-1]
25. Huang, W. H., Lin, Y. J., and Lee, H. F. (2019). Impact of Population and Workforce Aging on Economic Growth: Case Study of Taiwan. Sustainability, Vol. 11 (22), 6301, [DOI:10.3390/su11226301.]
26. Kamali Dehkordi, P., Ghobeyshavi, A., Abdollahi, F., and Farhadi Sartangi, D. (2018). Evaluating the Impact of Shocks due to Financial Development and Due to Health Expenditure on the Labor Productivity of Manufacturing Sector. Journal of Industrial Economics researches, Vol. 2 (4), pp. 73 88 . (In Persian) [doi :10.30473/indeco.2020.38737.1099]
27. Lai, S. L., and Yip, T. M. (2022). The Role of Older Workers in Population Aging-Economic Growth Nexus: Evidence from Developing Countries. Econ. Change Restructuring, Vol. 55 (3), pp. 1875-1912. [DOI:10.1007/s10644-021-09370-4]
28. Lotfalipour, M. R., Falahi. M. A., and Hoseini, S. (2015). The Effect of Trade Openness on the Total Factor Productivity in Iran's Large Scale Industries. The Economic Research (Sustainable Growth and Development), Vol. 15 (2), pp. 95-116. (In Persian) [URL: http://ecor.modares.ac.ir/article-18-11291-fa.html]
29. Lundberg, E. (1961). Produktivitet Och Rdntabilitet: Studier i Kapitalets Betydelse Inom Svenskt Ndringsliv. Studieförb. Näringsliv o. samhälle, Stockholm.
30. Maestas, N., Mullen, K. J., and Powell, D. (2016). The Effect of Population Aging on Economic Growth, the Labor Force and Productivity. National Bureau of Economic Research, No. w22452. [DOI:10.3386/w22452]
31. Malmberg, B., Lindh, T., and Halvarsson, M. (2015). Productivity Consequences of Workforce Aging: Stagnation or Horndal Effect? Population and Development Review, Vol. 34, pp. 238-256. [https://www.jstor.org/stable/25434766]
32. Mehrbani, V. (2016). The Effect of Higher Education on Productivity of Iranian Industries: A Comparison of Human Capital and Filter Theories. Economics Research, Vol. 16 (62), pp. 137-158. (In Persian) [doi: 10.22054/joer.2016.7025]
33. Moradi, A., and Mostashari, F. (2018). The Effects of Public and Private Health Expenses on Workerforce Efficiency in Iran (2004-2014). Journal of Health Administration, Vol. 21 (72), pp. 29-41.(In Persian) [URL: http://jha.iums.ac.ir/article-1-2339-fa.html]
34. Nasiri, N. (2020). The Role of Training on Human productivity. Advertising and Sales Management Journal, Vol. 1 (2), pp. 29-41.(In Persian) [URL:https://www.sid.ir/paper/269683/fa]
35. Ohikhuare, O., Oyewole, O., and Adedeji, A. (2022). Public Health Investment, Human Capital Accumulation, and Labour Productivity: Evidence from West Africa. Zagreb International Review of Economics and Business, Vol. 25 (2), pp. 139-163. [DOI:10.2478/zireb-2022-0019]
36. Omeonu, P. E., Babalola, D. A., and Nwankwo, I. V. (2023). Can Public Health Expenditure Influence National Productivity in an Agrarian Economy? Evidence from Nigeria. African Journal of Economics and Sustainable Development, Vol. 6 (1), pp. 64-74. [DOI:10.52589/AJESD-VIWM7EKL]
37. Osathanunkul, P., Dumrong, P., Yamaka, W., and Maneejuk, P. (2023). The Nonlinear Impacts of Aging Labor and Government Health Expenditures on Productivity in ASEAN+3 Economies. Economic Analysis Plicy, Vol. 80, pp. 450-470. [DOI:10.1016/j.eap.2023.08.021]
38. Ozimek, A., DeAntonio, D., and Zandi, M. (2018). Aging and the Productivity Puzzle. Moody's Analytics, American Economic Association Conference, held in Philadelphia. [https://ma.moodys.com/rs/961-KCJ-308/images/2018-09-04- Aging-and-the-Productivity-Puzzle.pdf.]
39. Ozylmaz, A., Bayraktar, Y., Isik, E., Toprak, M., Bilal Er, M., Besel, F., Aydin, S., Firat Olgun, M., and Collins, S. (2022). The Relationship between Health Expenditures and Economic Growth in EU Countries: Empirical Evidence Using Panel Fourier Toda-Yamamoto Causality Test and Regression Models. International Journal of Environmental Research and Public Health, Vol. 19 (22), 15091. [DOI:10.3390/ijerph192215091] [PMID] []
40. Prendergast, C. (1999). The Provision of Incentives in Firms. Journal of Economic Lit., Vol. 37 (1), pp. 7-63. [DOI:10.1257/jel.37.1.7]
41. Raeispour, A., Pajooyan, J. (2014). A Survey on Public Health Expenditure Investment Effects to Economic Growth & Productivity in Iran: A Regional Approach. Planning and Budgeting, Vol. 18. (4), pp. 43-68. [URL: http://jpbud.ir/article-1-1116-fa.html (In Persian)]
42. Raghupathi, V., and Raghupathi, W. (2020). Healthcare Expenditure and Economic Performance: Insights from the United States Data. Front Public Health, Vol. (8), [DOI:10.3389/fpubh.2020.00156] [PMID] []
43. Rahmani, T., and Motamedi, S. (2018). The Impact of Foreign Direct Investment on Capital Formation, Productivity and Economic Growth in Developing Countries. Economic Growth and Development Research, Vol. 8 (30), pp. 117-132.(In Persian) [URL: https://egdr.journals.pnu.ac.ir/article_2732.html]
44. Rajabi Farjad, H., and Pour Hashemi, S. H. (2016). Measuring the Impact of Information Technology on Employee Productivity. Resource Management in Police Journal of the Management Dept, Vol. 4 (13), pp. 169-194.ID. [https://sid.ir/paper/519300/fa (In Persian)]
45. Rasekh Jahromi, E. (2015). The Effects of ICT on Employment and Labor Productivity in Iran's Economy. Digital and Smart Libraries Researches, Vol. 2 (3), pp. 73-80. [URL: https://lib.journals.pnu.ac.ir/article_3509.html (In Persian)]
46. Santiago, R. D., and Tubayan, E. J. C. (2016). The Relationship of Health-Related Factors to Labor Productivity of the ASEAN-5. Review of Integrative business and Economics Research, Vol. 5 (4), 138. [https://sibresearch.org/uploads/3/4/0/9/34097180/riber_s16-057_138-170.pdf]
47. Schultz, T. W. (1961). Investment in Human Capital. American Economic Review, Vol. 51 (1), pp. 1-17. [https://www.jstor.org/stable/1818907]
48. Shojaei, S. S., Jamali, Gh., and Manteghi, N. (2016). Identification of the Effective Elements on Human Resource Productivity. Journal of Research in Human Resources Management, Vol. 8 (2), pp. 161-181. [URL:https://hrmj.ihu.ac.ir/article_205747.html (In Persian)]
49. Strauss, J. (1986). Does Better Nutrition Raise Farm Productivity? Journal of Political Economics, Vol. 94 (2), pp. 297-320. [DOI:10.1086/261375]
Rights and permissions
Creative Commons License This work is licensed under a Creative Commons Attribution 4.0 International License.