Effects of Health Factors on GDP Growth: Empirical Evidence from Saudi Arabia

Abstract

The primary objectives of this study are to examine the presence of long-run equilibrium relationships and short-run dynamic relationships between health factors and GDP growth in Saudi Arabia over a specific time period. By utilizing an annual time series dataset from 1990 to 2019 obtained from the World Bank, the study focuses on four key health factors and employs the Johansen cointegration test and vector error correction model to estimate the relationship between these factors and GDP growth. The results indicate the existence of a long-run equilibrium relationship between the health factors and GDP growth; however, in the short term, the variables are found to be in a state of disequilibrium. Specifically, the study reveals that infant mortality, road traffic mortality, and healthcare expenditure exhibit a strong negative relationship with GDP growth, while the maternal mortality ratio displays a weak positive relationship. The findings of this research hold significant implications for policymakers who are striving to achieve sustainable GDP growth as outlined in Saudi Vision 2030. These findings suggest that policymakers can simultaneously promote higher GDP growth and reduce infant mortality, road traffic mortality, and healthcare expenditure. Although the maternal mortality ratio exhibits a relatively weak positive relationship with GDP, it is still crucial for policymakers to address this issue to enhance sustainable GDP growth, aligning with the objectives set forth in Saudi Vision 2030. Overall, this study bridges a research gap and provides valuable insights that can inform health and economic policies in Saudi Arabia.