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<p>This study offers sufficient evidence to support the causal link between population health, economic growth, income inequality, and the role of wages and labor productivity in this causal link. The Panel VAR model was utilized to gather data from 33 provinces in Indonesia. An annual panel data collection from the Central Bureau of Statistics and the Indonesian Ministry of Manpower was collected to obtain significant observations from 2005 to 2023. There have been 627 observations made. The most important realization is that productivity and wages are the key factors that bind the causal relation between health decline, economic growth, and income inequality. Economic growth can be facilitated by a healthy community that improves labor productivity, at the same time reducing income inequality by improving workers’ wages and reducing health costs for low-income families. Health decline is among the consequences of income inequality and slowing down labor productivity. Wages stimulate the acquisition of skills by workers, which will lead to an increase in their productivity.</p>

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Are Labor Productivity and Wages the Primary Factors in the Causal Relationship Between Population Health, Economic Growth, and Income Inequality?

  • 期刊论文

  • 发表日期：

    2025年9月20日

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  • Abdulrahman Taresh,
  • Wasiaturrahma,
  • Khawla Abdullah Sakran

摘要

This study offers sufficient evidence to support the causal link between population health, economic growth, income inequality, and the role of wages and labor productivity in this causal link. The Panel VAR model was utilized to gather data from 33 provinces in Indonesia. An annual panel data collection from the Central Bureau of Statistics and the Indonesian Ministry of Manpower was collected to obtain significant observations from 2005 to 2023. There have been 627 observations made. The most important realization is that productivity and wages are the key factors that bind the causal relation between health decline, economic growth, and income inequality. Economic growth can be facilitated by a healthy community that improves labor productivity, at the same time reducing income inequality by improving workers’ wages and reducing health costs for low-income families. Health decline is among the consequences of income inequality and slowing down labor productivity. Wages stimulate the acquisition of skills by workers, which will lead to an increase in their productivity.