Improving individual health not only enhances labor productivity but also boosts the productivity of society as a whole. China’s economic development is in urgent need of transitioning from being driven by factors to being driven by innovation, which places higher demands on Health Human Capital (HHC). An evaluation system consisting of 18 indicators across four dimensions—basic health, preventive healthcare, medical resources, quality, and healthy environment—was used to calculate the HHC index of 31 provinces and cities in China from 2005 to 2019 using the entropy method. Following that, this study assessed the influence of HHC on economic growth using endogenous growth theory and the Corgis production function. Firstly, we discovered that the level of home healthcare services in China is on a steady incline, with eastern China showing better results compared to western and northeastern regions. Secondly, enhancing HHC will lead to a rise in the local real per capita GDP and foster economic growth, although there may be regional disparities. Thirdly, provinces with a higher level of economic development exhibit a more significant promoting effect, with southern China showing a greater impact than northern China. China should continue to prioritize both efficiency and equity in the allocation of medical and health resources, while also working to reduce the disparities in HHC development among different regions.
In the new era of economic transition, China’s economic development is in need of a shift from factor-driven to innovation-driven. The demand for Health Human Capital (HHC) is increasing as sustained and stable economic growth becomes a priority. Improving one’s health not only enhances the productivity of individual workers but also boosts the productivity of society as a whole, leading to increased economic growth rates (Worldbank, 1993). The level of actual economic growth is contingent on the utilization of potential productivity and production capacity, with the quantity and quality of local physical and human capital playing a crucial role in determining production capacity (Chao and Ren, 2011). China has placed a strong focus on enhancing the health of its population in order to ensure a solid foundation for economic growth in recent times. The “Healthy China 2030” Plan outlines the importance of building a healthy China as a national strategic priority, offering policy direction for the advancement of China’s HHC. As per the report presented at the 19th CPC National Congress, it is emphasized that “the well-being of the people is a fundamental prerequisite for the advancement of economic and social progress, and the health of the population serves as a crucial indicator of a thriving and prosperous country.” In accordance with the 14th Five-Year Plan for National Economic and Social Development of the People’s Republic of China and the Outline of Long-term Goals for 2035 released in 2021, there will be a strong focus on enhancing the quality of the population, establishing a top-notch education system, and a comprehensive healthcare system to advance the development of a healthy China.
Human capital is the combined knowledge and skills held by individuals, groups, or organizations, along with individuals who hold economic value within a country (Schultz, 1961, Becker, 1964). Any expenses that enhance the quality and knowledge, skills, capabilities, and health of workers are considered as investments in human capital (Campbell et al., 2012, Nyberg et al., 2014, Ployhart et al., 2014, Ployhart and Moliterno, 2011, Wright et al., 2014). Health, along with education, is a crucial aspect of human capital. The concept of “Health” being considered a part of human capital was officially introduced in the article “Health as an Investment”, which highlighted that “elements like health, knowledge, skills, and work experience collectively make up the human capital reserve of workers” (Mushkin, 1962). According to the World Health Organization (1990), an individual can be deemed truly healthy when they are physically, psychologically, socially adapted, and morally sound, which is intertwined with their knowledge, beliefs, morals, laws, customs, humanistic qualities, and other social factors (Merson et al., 2012). The input of HHC leads to an increase in production efficiency per unit time and a rise in the net present value of income due to the extension of people’s lifetime working time.
China, being the developing country with the largest population in the world, is constantly growing and evolving. In 2020, China’s population surpassed 1.41 billion, with approximately 969 million falling within the working-age bracket of 15 to 64, making up 68.60% of the total population. Although the total labor force is substantial, the population dependency ratio has been on the rise since 2010, increasing from 34.20 percent to 45.90 percent in 2020. As China’s population continues to age, the population dividend is gradually diminishing. Enhancing the HHC level will speed up the shift from population burden to human capital advantage, ultimately making a significant contribution to China’s economic growth. Given the current domestic and international context in the new era, the need for industrial transformation and upgrading, as well as high-quality economic development, is placing greater emphasis on the level of human capital. As a result, the role of HHC is becoming increasingly significant. Hence, defining and measuring HHC on a larger scale, as well as exploring how HHC is formed and its effects on economic growth, can help in crafting more comprehensive and efficient health support policies. This, in turn, can drive the enhancement of HHC levels in China and foster sustainable and harmonious development of both health and economy.
Literature review
Health human capital measurement
In recent years, China’s economy has seen impressive growth, leading to notable advancements in both the quantity and quality of medical services. Additionally, there has been progress in addressing the unequal distribution of health resources across different regions and in enhancing the efficiency of medical services (Ding et al., 2018). Health investment involves consumers purchasing medical insurance, medical treatment, and other services and commodities, as well as taking time for rest and exercise (Grossman, 1972). The measurement of human capital for health utilized certain variables, including the annual population mortality rate(Kelley and Schmidt, 1995). Average life expectancy was utilized as a proxy variable for health (E.Bloom et al., 2004). Nevertheless, the average life expectancy is determined based on a specific age-specific mortality model, which may not capture the complete health aspects of human morbidity, disability, and discomfort. Established in 1989, the International Network for Healthy Life and Disability Progress (REVES) combines death and health data to estimate healthy life span for 49 countries worldwide as of 1988 (Robine and Romieu, 1998). The World Health Organization (1990) categorizes health into four dimensions: physical, mental, social adaptation, and moral. The European Commission for Public Health defines health in four dimensions: health services, socio-economic conditions, lifestyle, and environmental factors. Multiple factors influencing HHC were synthesized and calculated into an index for measuring health(Aguayo-Rico and Guerra-Turrubiates, 2005).
Health human capital and economic growth
An individual in good health could receive education in a superior condition and consequently acquire more human capital(Ram and Schultz, 1979). One of the key factors contributing to economic disparities is the variation in HHC levels across different countries and regions (Fogel, 2004, N.Weil, 2014). Enhancing HHC will boost the availability of social labor, thereby driving economic growth. However, an overemphasis on health investment may lead to the crowding-out of other production factors, ultimately hindering economic expansion to a certain extent (Zon and Muysken, 2003). There is no enduring positive correlation between HHC and economic growth. As the economy advances, the enhancement of health leads to a decrease in the marginal contribution rate to the economy, while also resulting in an increase in life expectancy and a rise in the social dependency ratio, which can impose a substantial burden on economic growth (Husain et al., 2014). Existing research primarily focuses on measuring HHC from both macro and micro perspectives. The macro perspective assesses the overall health status of a country or region’s population at the national level, primarily through statistical indicators like population mortality rate and disease mortality rate. On a smaller scale, measurement techniques primarily involve questionnaires, with individuals assessing their own health. Even though obtaining such data is simple, it remains highly subjective. To address this issue, certain surveys incorporate objective indicators like blood pressure, height, and weight based on their specific research objectives (Kumar et al., 2019, Mazhar and Rehman, 2022). While most studies on the impact of human capital on economic growth concentrate on education, research on health and economic growth began later and primarily uses individual and family microdata to examine the effects of individual health on productivity and income levels. At the macro level, the majority of indicators are individual, with varying selections and a lack of standardized HHC measurement criteria. Therefore, there is an urgent need to establish a more comprehensive HHC index measurement system. This paper chooses eighteen indicators from four dimensions: basic health, preventive healthcare, medical resources and quality, and healthy environment. The entropy weight method is employed to determine the HHC index, thus enabling a more comprehensive assessment of HHC levels and their influence on economic growth.
Measurement of health human capital
Selection of indicators
Compounding involves utilizing statistical methods to merge various factors that impact human capital for health into an evaluation index. This index is derived from the European Commission for Public Health’s definition of the health dimension, encompassing health services, socio-economic conditions, lifestyle, and environmental factors. When developing HHC indicators, it is important to take into account the availability and quantification of data related to the indicators. By establishing certain standards and references, these indicators can be compared vertically and horizontally, allowing for an assessment of the development and changes in HHC over time, as well as a comparison of HHC levels across different regions. The continuity and dynamism of the indicators should be maintained, reflecting changes in health indicators over multiple periods of time with related factors.
As science and technology advance and society continue to evolve, the assessment of HHC should encompass both economic and social factors thoroughly. It is no longer restricted to just demographic factors; rather, it should be expanded to encompass various dimensions like medical and health resources, environment, and behavior (Tafadzwanashe et al., 2016). In 2007, the Ministry of Health of China’s National Health Statistics Indicator System established a five-dimensional population health indicator system, encompassing health status, prevention and healthcare, medical services (both traditional Chinese medicine and Western medicine), health supervision, and health resources (covering both traditional Chinese medicine and Western medicine). Drawing from the trend of social evolution and incorporating the features of HHC, this paper identifies four primary indicators—basic health, preventive healthcare, medical resources and quality, and a healthy environment. Utilizing a complex methodology, an HHC index system is developed within the Chinese context at a macro level (refer to Table 1). In order to assess the progress of HHC in 31 provinces (regions) between 2004 and 2019, and provide an accurate representation of the health status and development level in each region.