The Effect of Unemployment on Health Capital

Abstract T his paper has considered the impact of unemployment on health capital in 136 countries during 2002–2010. The review of presented literature on health capital shows that the life expectancy has been considered as a proxy for health capital. Although, there are numerous studies that surveyed the mental and physical effects of unemployment, but there is no previous study in our knowledge that investigates the influence of unemployment on life expectancy in these countries. In addition, the effects of other macroeconomic factors including inflation, gross capital formation and development degree on life expectancy are analyzed as well. To do this, the data provided by World Bank is used and the presented model is estimated by panel data method. The results show that unemployment affects the life expectancy, negatively. Also, the effect of inflation on life expectancy is negative and statistically significant. However, gross capital formation is the main positive economic factors for improving longevity. The development degree of countries is positively related to the life expectancy. So, the average of life expectancy in developed countries is more than poor countries. Also, the urbanity is the main socio-environmental cause for life expectancy. Therefore, in terms of policy, it is recommended that the planning for creating the new job opportunities and enhancing the national incomes take in consider by policy makers in order to use of health capital benefits for economic development especially in developing countries.