Income Growth in China: on the Role of Health

This study estimates income effects of health based on observations in China, the largest developing economy in the world. We derive the basic analytical model treating health as a form of human capital in income production. The major findings of this study are: First, China’s experience suggests that health human capital may have played a role in its rapid income growth during the 1990s. Second, the private economic return to health is significantly higher for the rural population than for the urban population; and also higher for women than for men. These findings offer rich implications for health and economic policy-making in efforts to reduce the long-standing urbanrural economic gap. These observations from China provide insights that may be relevant for other developing nations.