Relationship Between Population Health and Economic Development on the Example of European Countries

Introduction

Human capital is an extremely important factor in the economic development of a country. On the other hand, the ultimate goal of socio-economic development is reflected in the improvement of quality of life. This goal includes ensuring social welfare and living standards (Veljković & Živković, 2018). In the analysis of the contribution of human capital to economic development, education is mainly taken into account. However, it is a very narrow interpretation of human capital as a factor of economic development. Both education and health of the population stand out as the main predictors of human capital growth (Anowor et al., 2020). As a rule, healthy people are more productive, which contributes more to the economic performance of the country. In addition, workers who do not have health problems are more physically and mentally energetic and thus have the opportunity to earn higher wages. Therefore, the population health must not be left out as part of human capital (Ray & Linden, 2018). In this regard, it should be noted that health as a component of human capital is often defined as health capital (Akingba et al., 2018). Population health is the result of economic well-being, the quality of health care and the quality of life of people in a particular country.

Problems of quantification of the health status of the population arise because it is a multidimensional problem. That is why research almost always uses a larger number of indicators, among which the following stand out: life expectancy, infant mortality rate, healthy life years, and government health expenditures. The paper aims to create a composite index of the health of the population of European countries, which is a relevant and scientifically based tool for comparing different aspects of the population health status. The basic assumption in the analysis is that countries that achieve better health status of the population realize greater economic development. To test this assumption, a multi-criteria model was created. Also, given that the long-term and slow effects of investing in the health of the population are obvious, the authors decided to assess the relationship between health and certain measures of economic performance for a representative research period.

The model incorporates Eurostat data for 2018 and includes 30 European countries and 8 health-related indicators: People having a long-standing illness or health problem, Self-reported unmet needs for medical examination, Deaths and crude death rate, Infant mortality rate, Population living in households considering that they suffer from noise, Share of people with good or very good perceived health, Healthy life years at birth, and Exposure to air pollution. Eurostat data for 2018 were used because there is still no data for all indicators for 2019. Multi-criteria analysis was applied to create composite indices, where in the first step the standard deviation method was applied to determine the weight coefficients of the criteria, while in the second step the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) method was applied as an aggregation method. The last part of the analysis is dedicated to establishing the relationship between the population health, as a determinant of the quality of human capital, on the one hand, and economic development, proxied by GDP per capita and Disposable income, on the other hand.