The impact of health status and human capital formation on regional performance: Empirical evidence

The purpose of this paper is to analyze the impact of health on growth, assuming that it is a fundamental component of the human capital of a region along with education. Various measures of population health status are used, together with a health index generated by Principal Component Analysis. Potential endogeneity between health and growth is controlled for using instrumental variable regressions and dynamic panel data. The results show a positive effect of a change in health status on regional output and a negative effect of proxy variables for health limitations on regional performance. This corroborates the importance of investing in health along with education with the aim of improving not only the well-being of individuals but the human capital and growth of a region