What drives the healthcare sector’s economic impact? Evidence from European countries

Timotej Jagric, Stefan Otto Grbenic, Vita Jagric*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


Purpose: With high public debts and suffering economies after the COVID-19 pandemic, governments will look for ways to promote recovery. Literature substantially reports on the favorable macroeconomic impact of the healthcare sector. Design/methodology/approach: The authors use data on 19 European countries. Over 30 variables are analyzed to find factors that foster or suppress the economic impact of the healthcare sector. The economic impact is thereby expressed through five types of total multipliers, acting as dependent variables. The authors estimate multiple econometric models. Findings: The results indicate factors that intensify or reduce the economic impact of the healthcare sector as they cause the value of one or more economic multipliers to augment or to diminish. Positive effects are expected from the growth of public funds' share in total healthcare expenditure leading to a higher output, income and value-added multipliers. The import multiplier diminishes when expenditure on healthcare as percent of GDP rises. On the other hand, rising expenditure on pharmaceuticals in the share of healthcare expenditure lowers the output multiplier. Rising GDP per capita and higher healthcare systems' technical efficiency cause the employment multiplier to lower. Originality/value: Policymakers can strengthen the economic impact of the healthcare sector on the national economy. This could be achieved by stimulating factors, being identified in our study. Strengthening the economic impact of the healthcare sector is especially welcomed when fostering economic recovery is needed.
Original languageEnglish
Pages (from-to)41-53
Number of pages13
JournalInternational Journal of Health Governance
Issue number1
Publication statusPublished - 11 Feb 2022


  • Economic footprint
  • Healthcare sector
  • Input-output tables
  • Multipliers
  • Sustainability
  • Health law or regulation
  • Political strategy
  • Health economics
  • Health policy
  • Emerging health economies
  • Health insurance plans

ASJC Scopus subject areas

  • Public Health, Environmental and Occupational Health
  • Business, Management and Accounting (miscellaneous)
  • Health Policy
  • Palaeontology
  • Strategy and Management

Fields of Expertise

  • Sonstiges

Treatment code (Nähere Zuordnung)

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