Impact of Health on Labour Productivity in Morocco: Insights from Dynamic ARDL and KRLS Techniques

This study examines the impact of health, as measured by life expectancy (LE), on labour productivity, measured by GDP per capita (GDPC), in Morocco from 1990 to 2021. Utilizing a dynamic Autoregressive Distributed Lag (DYNARDL) model, along with the Kernel-Based Regularized Least Squares (KRLS) method, we assess the counterfactual impact of life expectancy while holding other variables constant. Our findings indicate that life expectancy has a significant and positive effect on labour productivity in both the short and long term. Specifically, a 1% increase in LE leads to a 6% increase in GDPC in the long run, while in the short run, this effect is even more pronounced, with a 1% change in LE resulting in a 14% variation in GDPC. These results highlight the critical role of health improvements in enhancing economic productivity in developing economies, aligning closely with the Sustainable Development Goals (SDGs), particularly Goal 3 - Good Health and Well-being and Goal 8 - Decent Work and Economic Growth. Additionally, DYNARDL simulations suggest that a projected 10% increase in life expectancy could initially accelerate labour productivity, although this acceleration rate diminishes over time, eventually stabilising. These findings underscore the importance of sustained health investments to achieve not only long-term economic growth in Morocco but also broader SDG targets, such as reducing inequalities and fostering sustainable, inclusive economic development.© The Author(s) 2024. Published by RITHA Publishing under the CC-BY 4.0. license, allowing unrestricted distribution in any medium, provided the original work, author attribution, title, journal citation, and DOI are properly cited.