Revisiting the Health Spending‐Growth Nexus

ABSTRACT The relationship between health spending and economic growth is shaped by multiple transmission channels, leading to inconsistencies in the empirical literature and a lack of definitive conclusions. To address this issue, we perform a meta‐analysis encompassing 522 estimates from 107 studies that examine the effect of health spending on economic growth. Our analysis uncovers the presence of a negative publication bias of moderate magnitude in the literature. However, after accounting for both publication bias and methodological shortcomings in the primary studies, we find that health spending exerts a substantial positive effect on economic growth. Furthermore, our findings demonstrate that the reported estimates are shaped by various factors, including differences in how economic growth and health spending are measured, the characteristics of the data, publication attributes, and the inclusion of other growth‐related variables.