The Impact of Development of Health Sector on the Economic Growth in Iran: With an Approach to the Constitution of I. R. I.

Health is being addressed as a right in the constitution of Iran. Moreover it is a tool, in the form of investment, to preserve the ability and efficiency of labor. It causes an increase in the health stock of the society directly and increases the motivation among the youth to continue their education and gain more skills indirectly. These direct and indirect effects will result in higher economic growth and efficiency. Therefore it is supposed that growth in the health sector of our country increases the economic growth. This study has tested the impact of health sector on economic growth using a Vector Error Correction Model (VECM), based on time series information between 1358 till 1385. Our findings through regressions show that the development of hygienic services indexing by Hospital beds per capita and per capita physician had positive effect on life expectancy. Estimating the model by life expectancy variable, elasticity of domestic production, excluding oil revenue, was 0.09 and by the under-5 mortality rate variable it was -0.13. These two indexes which show the development in health sector had positive effect on economic growth which proves the hypothesis.