The Effects of Public and Private Health Expenses on Workerforce Efficiency in Iran (2004-2014)

Today, it is widely accepted that workerforce efficiency plays an indelible role in the economic growth of a country. This research study investigated the effect of public and private health expenses on workerforce efficiency in provinces of Iran.
This research was conducted, using data provided by Iran Statistics Center in 2004-2014. The data were selected on the basis of the panel data method. To this end, Romer’s indogenous growth model, MG econometrics technique, PMG, FED were evaluated and based on Hausman’s test, the appropriate model was chosen. The based on cointegration panel method and through FMOLS and DOLS estimates, the long-term relationships were derived taking cross-sectional correlation. Finaly, PMG causal test was performed.
Based on the findings, both private and public health expenditures had a positive and significant effect on workerforce efficiency in the provinces of Iran, and effectiveness of public health expenditures was higher than that of the private sector. Moreover, the results of the PMG causality test indicated that there was a long-term causal relationship between public and private health expenditures toward workerforce efficiency.
To increase the efficency of workerforce, the government should try harder to improve its investment on health in less developed provinces.