The Impact of Health on Per Capita Income, An Empirical Analysis in Middle Income Countries

The main objective of this study is to investigate the effect of health indicators (life expectancy and mortality rate) on per capita income. to do so, a panel data of 93 middle income countries over the period 1980-2011 is used. Panel data regression models including fixed effects, random effects and generalized method of moments (GMM) used to determine the effect of health indicators on per capita income. The results showed that the relationship between health indicators and per capita income is not monotonic and follows an U -shaped relationship. Since all of the countries passed turning point of U - shaped curve, one can say that improving health indicators in these countries significantly increases per capita income.