MACROECONOMIC DETERMINANTS OF HEALTH OUTCOMES IN NIGERIA

Abstract

Health outcomes describe an individual’s health, as well as the quality of life and ability to function effectively. Health economics literature indicated that health outcomes are affected by genetics, lifestyles, environment and socio-economic factors; and that socio-economic circumstances are strong predictors of health outcomes, as they are more evident in their health status. Empirical literature on the socio-economic determinants of health outcomes have focused on micro perspectives, involving partial equilibrium analysis, to the neglect of macroeconomic considerations, such as household income and lifestyle. This study, therefore, examined the macroeconomic determinants of health outcomes in Nigeria between 1980 and 2011, because the period represented an appreciable part of the country’s post-independent era.

The study was predicated on the Grossman analytical framework rooted in the human capital development theory. A macroeconomic model incorporating major macroeconomic variables in explaining health outcomes was explored. Two variants of the model were estimated based on alternative measures of health outcomes by life expectancy and under-five mortality. The life expectancy model examined the influence of literacy rate, government health expenditure, total number of health workers and per capita income, while the under-five mortality model examined the influence of immunisation rate in addition to the other factors. Ordinary least square estimation technique that took into consideration error correction mechanism was used. Tests of the model’s reliability were carried out using descriptive statistics, unit root and co-integration tests. Data were collected from World Development Indicators and Central Bank of Nigeria Statistical Bulletin, Vol. 23 of 2012. All estimates were validated at p≤ 0.05.

Government health expenditure, per capita income and literacy rate had positive significant effects on life expectancy. A 0.4% increase in literacy rate increased life expectancy by one year, while 0.3% and 2.6% increase in government health expenditure and per capita income, respectively, increased life expectancy by one year. The total number of health workers had a positive but insignificant relationship with life expectancy. Literacy rate was significant in explaining under-five mortality. Every 10.0% increase in literacy rate reduced under-five mortality by about 4 per 100,000 live births. The influences of government health expenditure, per capita income and immunisation rate were not significant, though their respective negative relationships suggested that they could be important in influencing health outcomes.

Macroeconomic factors were critical to improving health outcomes in Nigeria. Therefore, government should strive towards increasing literacy rate and per capita income, as well as target its health expenditures and immunisation programmes, especially, at the under-five.

Keywords: Life expectancy, Under-five mortality, Health outcomes in Nigeria, Per capita income, Macroeconomic determinants

Word count: 408