Grossman's Human Capital Model

INTRODUCTION

The quote “health is wealth” has become a well-known quote round the word. This quote denotes the importance of health in man and society. Gross domestic product (GDP) has always been as an increase in the output of a country; but development has taken the focus of every country now, as all countries want to achieve development- a sustainable one at that. Development being looked at as capacity by Amartya Sen no more is growth in output. From the quote, it can be easily said that without health, there can’t be health. Concentrating at the different literature from which we shall see later, GDP has become one of the determinants of development and not the only one; while health has joined the model looking at Grossman model. It

So we see the importance of education and health in productivity in grossman’s human capital model. In his model he allows health capital formulation to be seen as a capital good, to be able to work, be able to earn money, and to be able to produce domestic goods. He revealed that a rise in the quantity of health capital decreases the amount of time loss of being sick; however, he assumes that people are born with a good amount of health at first, and depreciates with time and age but increases due to investment directed to health (grossman, 1972).Health care as a right of every individual has been recognized in many

Infant mortality as an indicator of health is very effective measure. It can affect the growth and development both in the long run and in the short run. Health expenditure on the other hand is the percentage of a country’s gross domestic product (GDP) for health purposes. Reviews about infant mortality and health expenditure in Africa have shown that health expenditure directly affects health significant. Most of these studies have stream lined their research to only health expenditure and has not put into consideration other indicators that might affect infant mortality; and this cannot be fully depended on. This is so because looking at the data available, there has not really been a significant relationship between infant mortality and health expenditure; cases where we see an increased in health expenditure doesn’t reflect in the infant mortality by way of a reduction and a reduction in infant mortality cannot be successfully traced to health expenditure. From data, sub Saharan African countries showed health expenditure (percent of GDP) as 5.7per cent in 1995, 6.9per cent in 2004 which has been the highest so far and 6.4per cent in 2011. However, infant mortality rate (per 1000 live births) showed 102.5per cent, 83.4 in 2004, 63.8in 2011 (world development index, WDI). From this data it is observed that the reduction in health expenditure did not have much great effect In infant mortality.