Health Capital and Economic Growth: Evidence from Georgia

Investments in healthcare are important in terms of formation of the health capital. The research aims to find out the role of the health capital in economic growth of a country.

This study is based on the secondary sources of data. The study data were obtained from Human Development Report, Ministry of Labor, Health and Social Protection of Georgia. As a proxy indicator for measuring the health capital we used the life expectancy at birth, the general and initial illness rate, the general, maternal and children’s mortality rate, outpatient referral rate, the state expenses on healthcare, the share of state expenditure in total expenditure on health and state expenditure on health as a percentage of the Gross Domestic Product.

The average life expectancy has increased in recent 25 years. The maternal and children’s mortality rate have decreased, healthcare expenses have become higher and outpatient referral rate has also become more constant character. All these have a positive influence on the people’s health and country’s economic growth. However, the state expenses on healthcare and outpatient referral rate are far below the European level.

As the health capital fulfills significant role in terms of the country’s economic growth in a long-run perspective, it is advisable to promote the development of the primary healthcare system and taking WHO recommendations concerning state healthcare expenses into account.