Impact of health capital on worker productivity in North Africa

Abstract

Health is an important form of human capital, enabling people to live their lives with great potential, and is an essential element in a country's development, given that a healthy worker has the physical and mental capacity to work more efficiently than an unhealthy one. This study aims to examine the effect of health capital (approximated by life expectancy) on worker productivity.

The study used a panel of North African countries from 1991 to 2021, applying a fixed-effects model, a random-effects model, and the Generalized Method of Moments (GMM). To test the impact of human health on worker productivity (which is GDP per person employed), we use a static panel. A dynamic panel is designed to study the effect of education (approximated by secondary school enrollment) on labor productivity. The results show that health has a positive and significant effect on labor productivity (a healthy life increases prosperity and improves the standard of living of individuals in the country), as well as a positive and significant impact of education on labor productivity for North African countries.

This study recommends that the government of every North African country must take essential measures and develop policies to improve health capital since it is one of the important indicators for improving labor productivity and stimulating economic growth.