Effects of Immigrants, Health, and Ageing on Economic Growth in the European Union

Abstract

Population ageing and low birth rates are two problems of the EU that have an impact on employment, production, and economic growth. Against this background, immigration, health expenditure, and the health of migrants must become a key element of European policy. For this reason, this paper focused on identifying the effect of immigration, health, and ageing on economic growth in order to highlight their importance from an economic perspective. We constructed different econometric models with Eurostat data for 27 countries and 13 years (2008–2020), whose dependent variable was gross domestic product. Independent variables were the number of immigrants by gender and age, health expenditure per capita (total and by function), immigrants’ perception of their health as very good, and the proportion of the population aged 65 years and over. The model selected to analyze the results was Prais–Winsten regression heteroskedastic panels corrected standard errors modeled by applying the option (ar1) to correct for autocorrelation, using Stata software (version 16). The results show that health expenditure has a significant positive effect on economic growth, higher in hospital services, followed by medical products; immigrants’ perception as very good is only significant in some models. The number of immigrants has a (positive) effect, although less significant than public expenditure on health. Its effect is larger when the immigrant is aged between 15 and 64 years and smaller for male immigrants than for female immigrants. Without the ageing variable, immigration is not significant. Moreover, there are significant differences between European countries in relation to the variables analyses (immigration, immigrants’ perception of their health, ageing and public expenditure on health, and public expenditure on health according to function). This may be due to the different regulations on both immigration and public health in the countries that make up the European Union.