Health sector investment impacts on employment and economic growth: A panel ARDL analysis in the West African Economic and Monetary Union (WAEMU)

Following the recommendations of the High-Level Commission on Health Employment and Economic Growth, the West African and Economic Monetary Union (WAEMU) has been the first sub-regional economic group to engage in developing a sub-regional health workforce investment plan and intensify regional cooperation to boost health employment.

However, the WAEMU region is facing severe challenges from the COVID-19 pandemic that has triggered a triple crisis impacting the health, economic and security situations. Both fiscal and monetary policies were relaxed significantly in 2020 to contain the pandemic and support the economy. Investments in the health sector are critical to economic activity, employment, and growth, as evident in various analyses, studies and reports describing the significant impacts of health investments on the economy.

The ILO led a study to examine the health-led growth hypothesis [Atilgan et al. (2017)] and assess the long-term quantitative employment impacts of WAEMU’s investments in the health sector. The study applies a novel econometric approach, the panel ARDL (autoregressive distributed lag) and identifies the factors that influence the relationship between health sector investment, employment, and economic growth in the WAEMU region. Moreover, it formulated policy recommendations for improving the impact of health sector investment on employment and economic growth in the WAEMU region.