Introduction

Economic growth can only be sustained if it is supported by a well-educated workforce. As various theories of economic growth say, human capital is an important factor in economic development. Education, health care, training, immigration, and other expenditures that increase an individual's productivity are all considered human assets in economic literature. When it comes to human capital, economists have focused on the function of education and training, but have neglected to consider the importance of physical and mental health. A new wave of research has recently focused on health and the potential link between improved well-being and increased economic output (Raza, Majeed & Islam, 2013). Improved health has a positive impact on the economy, but the link is two-way. The Pakistani government's National Health Policy of 2009 was a major step in the right direction. Health workers will be retrained, and reliable health data will be gathered and used in the planning and implementation of the program. Technology will be used with caution. Pakistan is dedicated to achieving these objectives and implementing an improved 2015 policy plan. Death rates for adults, children, and pregnant women should all drop by 2015 thanks to a variety of health-related initiatives and measures.

Importance

As was discussed in the beginning of this article, a great deal of research has been done on the topic of the connection between the growth of human capital and economic expansion. According to these studies, human capital has a direct correlation with growth in economic output. As recently as the last decade, there has been an explosion of research into the link between health and economic development (Muhammad, Khan & Hassan, 2016). According to Mirvis, Chang & Cosby (2008), a positive correlation exists between the adult mortality rate and economic growth. This holds true even when life expectancy is substituted for the adult survival rate. Economic growth, on the other hand, has a negative relationship with the fertility rate (Mirvis, Chang & Cosby, 2008). Life expectancy is heavily impacted by the death rate of children. The growth of the workforce is usually smaller than the increase of the population. In the end, a high fertility rate hurts economic growth because it puts more pressure on resources that are already scarce.

Additionally, Raza & Majeed (2013) measures health status based on the likelihood of adult survival for each gender and age group. The results of a causality test of the Granger type show that improvements in Latin America's health status, particularly in Brazil and Mexico, are linked to rising economic activity. Annual income increases of 0.8% to 1.5% are related to better adult health (Bhargava et al., 2001). Furthermore, the growth impact of improving the health of women is greater than that of improving the health of men.

For example, according to Fogel (2004), GDP is positively affected by both life expectancy and educational attainment. Both labor productivity and capital accumulation can be increased by improving health. One year of increased life expectancy in a population resulted in an increase in productivity of 4%. Based on survival and life expectancy rates for adults with average heights in different nations, Fogel (2004) found that health has a significant impact on economic disparities. Variability in people's health status across countries explains 17–20% of the variation in income across countries (Fogel, 2004).

Arora (2001) uses life expectancy at birth, at ages five, ten, fifteen, and twenty, and the structure of adolescence as health indicators for 10 industrialized countries. A new study found that a 30–40% rise in long-term economic growth can be attributed to better health. According to the study, developing countries' low long-term growth can be attributed to high rates of disease prevalence and death (Muhammad, Khan & Hassan, 2016). Grimm (2011) studied the impact of the death rate on economic growth. One study found that an increased mortality rate reduces economic growth by shortening the temporal horizon. Consequently, people choose activities that provide short-term gains at the expense of long-term benefits (Grimm, 2011).

Effects

To put it another way, health is wealth in the most basic sense. In terms of overall human well-being, physical fitness is the most significant factor. It is a logical claim that a country's high per capita economic growth is caused by a healthy population (Bhargava et al., 2001). Robustness increases the ability of employees to accomplish their jobs and reduces sickness, disability, and the ratio of sick days taken each day, as well as shrinks the number of people who can get better-paying jobs through other means Fogel (2004). In addition, a healthy lifestyle can help students do better in school. The growth economists who have included human capital in their research have been praised for their superior attention to the impact of entrepreneurial education on entrepreneurial intention, but they have shown carelessness in the case of human capital. Researchers have been trying to figure out how health affects economic growth for a long time now, not just recently.

There were 28 deaths per 100 live births in developing countries during the 1950s; this number rose to 63 in the 1990s, while the average life expectancy was raised from 40 to 63 years (Bhargava et al., 2001). At the same time, the death toll among children has been reduced as a result of effective immunization. As a result, mortality rates in less developed countries are ten times higher than in countries with a well-established market economy. Pregnancy-related deaths claim the lives of about 400,000 women each year (Raza, Majeed & Islam, 2013). On average, maternal mortality rates in developing nations are 30 times higher than in high-income countries. However, mortality rates are decreasing with time as a result of sound health policies. According to an economic analysis, the government's shortfall in Pakistan is expected to be largely funded by underinvestment in the health sector (Muhammad, Khan & Hassan, 2016). Pakistan is ranked last on this list. Pakistan had high rates of neonatal and maternal mortality, which reduced the country's life expectancy.

Impact and mechanisms

The business sector stands to gain significantly from the adoption of the health economic model proposed here. Benefits provided by companies, rather than pay, are often based on the goals of improving recruitment and retention, the desire to benefit from particular tax advantages, and the ethical value of improving human well-being (Fronstin & Werntz, 2004). An economic investment case for health care is outlined in the "health as an economic engine" approach. As with other types of financing and infrastructure, health care for employees is an investment in education that adds value to the company, not just a benefit cost.

According to Fogel (2004) successful initiatives by companies to boost productivity through employee wellness have been documented (2000). The financial impact of illness on a firm is enormous. Every year, the equivalent of over two million full-time employees miss work due to illness-related absences (Fogel, 2004). Because of the increased "presenteeism" that their bad health causes, the decreased productivity of sick employees while they are on the job has an even greater influence on costs. As many as one-fourth of workers have at least one day a month when they are either unable to work because of a medical issue or are less productive at their job (Raza, Majeed & Islam, 2013).

Chronic pain and depression have been shown to have a significant impact on productivity in recent studies (Mirvis & Clay, 2008). There is an estimated $44 billion in lost productivity costs to companies each year due to depression in the workplace. Over $61 billion in productivity is lost each year as a result of pain. Presenteeism accounted for more than three- fourths of all lost productivity in each case. Employees who aren't in good health or die young leave their jobs more often, which raises the cost of replacing them and reduces the long-term benefits that come with long-term experience (Mirvis & Clay, 2008). Over the course of a decade, the total economic effect of chronic disease-related absences and tardiness might reach $5.7 trillion by 2030.

Evidence from papers

In Pakistan, there is debate about whether or not the "health as an economic engine" approach can work and how it can be used (Bhargava et al., 2001). In general, the study of the relationship between health and economic growth is difficult. It is necessary to consider a variety of factors, such as whether or not health and economic indicators should be used; whether or not causality exists and, if so, in which direction; whether or not it is a primary force; and whether or not non-health variables, such as education and social cohesion, should be considered as covariates (Mirvis, Chang & Cosby, 2008). Furthermore, others have questioned the link between health and economic conditions. According to reports, changes in adult survival explain only a small portion of the variation in per capita income across counties (Mirvis & Clay, 2008). Others say that the model downplays the value of good health on its own in favor of its role in economic growth and that it puts more emphasis on spending on health care than on social reforms that would really help people get out of poverty.

It is yet to be demonstrated empirically if it can be applied to parts of an affluent country like the United States, as opposed to poor countries as a whole. To be sure, there are generalizable principles for how health impacts economic development that were discussed at the symposium (Grimm, 2011). Even within a reasonably wealthy nation, the dynamics of health and wealth may be different in a poor section of the country than in the entire country. Health and economic development appear to be more closely linked in impoverished countries than in wealthier ones, according to a number of studies, including Preston's fundamental work (Grimm, 2011). Some comparatively wealthy people in a poor country may be better off than the impoverished in a rich country (Grimm, 2011). It is also possible that a region's relative richness and health can be buffered by the rest of the country's wealth and health, such that the national qualities may take precedence over those of a single region. It is possible that inside a single nation, the flow of resources, information, and technology is superior to the flow between richer and poorer ones.

Conclusion

The short-term and long-term effects of healthy human capital on economic growth are the primary focus of this article. To achieve this goal, cointegration is necessary. Error correction strategies have been employed in conjunction with this method. There is a relationship between per capita GDP and a variety of other factors, such as the number of people in secondary school and the average age of those enrolled, as well as life expectancy and the mortality rate, but no such association exists for health care spending. The findings show that long-term economic growth is strongly influenced by the health of the population because all health outcomes have a substantial impact on long-term economic growth. According to the error correction model, health indicators do not have a major impact on economic growth in the short term (Raza, Majeed & Islam, 2013). In the short term, there doesn't seem to be a link between health and economic growth, which suggests that health's effects only happen over the long term.

By expanding and improving human capital, countries with low human capital can achieve high levels of per capita income like Pakistan, especially if existing stock levels are low. Further research shows that public health expenditures play just a little effect in determining GDP per person (Grimm, 2011). The findings of this study imply that since health is an important component of human capital, it must be taken into account when calculating growth rates for the population at large. For the past several years, there has been an urgent need to do a study that examines the dynamics of Pakistan's health care market. Also, there needs to be a comparison of how private and public health care facilities contribute to improving the health of human capital (Grimm, 2011).

References