Economic Growth, Health and Poverty: An Exploratory Study for India

This article analyses the possible links between economic growth, poverty and health, using panel data for the Indian states. The findings indicate that, though growth tends to reduce poverty, significant improvements in health status are also necessary for poverty to decrease. Also, economic growth and health status are positively correlated and have a two‐way relationship, suggesting that better health enhances growth by improving productivity, and higher growth allows better human capital formation. Health expenditure is an important determinant of both higher growth and better health status, and is therefore a key tool available to policy‐makers. Among other exogenous variables, literacy and industrialisation seem to improve both health outcomes and growth, and to reduce poverty.