The Impact Of Public Health Policy On Labor Force Participation In Pakistan:A Bound Test Approach

Labor force participation of peoples is the prevalent factor for the economic growth and economic development of the country.Currently,most of the populations in the developing countries are out of labor force which results in less development of the country.The main objectives of the current study to examine and forecast the short and long run nexus of public health policy on the labor force participation in Pakistan.The study selects eight indicators for the in-depth measurement of public health policy in Pakistan.These eight indicators were found to be most appropriate in the public policy,as it cover major portion like health related issue,education,economic issue and personal income of an individual.Higher labor force is the engine for economic development in Pakistan.It derives economic expansion and increase GDP of the country due to the fact that labor force has positive nexus to GDP growth rate in Pakistan.Moreover,the study relies on time series data which was collected from the World development indicator(WDI)and Pakistan bureau of statistics for the period of forty five years(1972-2016).This helped in providing comprehensive description of the labor force participation.The study used auto regressive distributed lagged(ARDL)and Bound test for the short and long run relationship.In addition,the study also used cumulative sum of residuals(CUSUM)and cumulative sum of squared of residuals(CUSUMSQ)for the stability of finding.Result of the study presents that most of the explanatory variables have significant short and long run relationship with the labor force participation of the country.Specifically,age dependency,health expenditure,secondary school enrollment,trade openness and gross capital formation are the most prevalent factors influencing the labor force supply of the country.Moreover,finding of the current study is confirmed through stability tests like CUSUM and CUSUMSQ.The study provides in depth information for the policy maker to design policy in favor of peoples in order to maximize the labor force and increase the economic development of the country.