Health Outcomes and Economic Productivity in Nigeria: Short Run Evidence from OLS–HAC Estimation

Abstract

This study investigates the short run relationship between key health outcomes and economic productivity in Nigeria using annual data from the World Development Indicators. Employing Ordinary Least Squares estimation with Newey West heteroskedasticity and autocorrelation consistent standard errors, alongside pairwise Granger causality tests, the study evaluates how life expectancy at birth, under five mortality, fertility rate, and current health expenditure influence labor force participation the proxy for economic productivity. The findings demonstrate that life expectancy has a statistically significant and strongly beneficial impact on labor participation, affirming the role of health as human capital. Under five mortalities also emerges positive and significant, suggesting that in the short run, child mortality related economic shocks may induce increased household labor supply. Fertility rate displays a negative and significant impact on labor participation, consistent with demographic and labor supply theory. Granger causality results reveal unidirectional causality from labor participation to both life expectancy and child mortality, indicating that higher economic engagement may enhance health outcomes while simultaneously exerting pressure on child survival. Collectively, the findings support a bidirectional health productivity nexus in Nigeria, where improved health enhances productivity in the short run, while higher productivity contributes to better health outcomes over time. The study recommends strengthening investments in life extending health services and child survival interventions to foster a healthier, more productive workforce and reduce vulnerability to mortality induced labor shocks.