HEALTH CAPITAL FORMATION MACROECONOMIC FACTORS IN CHINA

Abstract

Introduction. Health capital, both a driver and a product of economic growth, is instrumental for China to capitalize on its vast human resources and advance its economic development. This study is aimed at examining the formation mechanism of macroeconomic health capital in China.

Materials and methods. Drawing on public data from China's National Bureau of Statistics (1990–2023), this study utilized a vector autoregressive model to calculate elasticity coefficients from a linearized equation, thereby investigating the linkages between macroeconomic factors and health capital at a macro level.

Results. No significant associations have been observed between the macroeconomic factors and macroeconomic health capital. However, the second lag of health capital exerted significant negative effects per capita government health expenditure, per capita educational funds, and the full employment rate.

Discussion. In terms of the return on health investment, China's government health expenditure has demonstrated suboptimal efficiency. Our study has not identified significant effects of macroeconomic factors on monetized health capital. China's aging population was one of the potential factors affecting the outcome. Moreover, the income effect of health capital in the labor market, its substitution effect on educational funds, and government health expenditure driven by health needs indicated that health capital has aligned more closely with a consumption model than an investment framework.