The Effect of Physical and Mental Health and Entrepreneurship on the Labor Force Productivity

Productivity has always been proposed as one of the fundamental aspirations of governments and an indicator to assess their performance. Achieving productivity, more than anything else, depends on the correct understanding of potential routes and the factors affecting it. In this paper was studied the effect of physical and mental health (government health-sanitary spending, the number of physicians and life expectancy) and entrepreneurship (registration of new companies) on the labor force productivity in 8 selected developing countries (including Iran) during the period of 2004-2012. To estimate the effects of the variables, the researchers used panel cointegration technique through Dynamic Ordinary Least Squares (DOLS) approach. The regression results indicate that all the examined variables have positive and significant effects on the labor force productivity.