Fiscal Policies on Economic Growth and Its Effects on Public Health and Education

This paper analyses the impact of fiscal policies on economic growth, public health and education in ten European Union countries. It examines the effects of fiscal policies on adult literacy rate and life expectancy at birth of citizens of these selected countries.

Running head: FISCAL POLICIES ON ECONOMIC GROWTH AND ITS EFFECTS ON
PUBLIC HEALTH AND EDUCATION
FISCAL POLICIES ON ECONOMIC GROWTH AND ITS EFFECTS ON PUBLIC
HEALTH AND EDUCATION
Name of the Student
Name of the University
Author Note

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FISCAL POLICIES ON ECONOMIC GROWTH AND ITS EFFECTS ON PUBLIC
HEALTH AND EDUCATION
Abstract:
Fiscal policy has significant importance for developing a country’s economic condition
during long-run. After the occurrence of endogenous growth model, fiscal policy has become
one of the important concepts to discuss. International economies have experienced dynamic
conditions and this in turn has influenced welfare along with standard of living. For
understanding the impact of this fiscal policy, the paper has considered ten European
countries through analyzing data of 2014 and 1980. With the help of proper analysis, the data
can understand the impact of public expenditure in these countries.

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Acknowledgment
I am thankful to my Professor, family members and my friends, who help me to during my
research work.

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Table of Contents
CHAPTER ONE: INTRODUCTION........................................................................................6
1.1 Introduction:.....................................................................................................................6
1.2 Background of the study:.................................................................................................6
1.3 Research Aims:................................................................................................................8
1.4 Research Objectives:........................................................................................................9
1.5 Research Questions:.........................................................................................................9
1.6 Problem statement:.........................................................................................................10
1.7 Rationale of the study:...................................................................................................10
1.8 Research hypothesis:......................................................................................................10
1.9 Structure of the study:....................................................................................................11
CHAPTER TWO: LITERATURE REVIEW..........................................................................13
2.1 Introduction:...................................................................................................................13
2.2 Concept of fiscal policy and its important:....................................................................13
2.3 Impact of public expenditure on economic growth:......................................................14
2.4 Impact of public expenditure on education:...................................................................15
2.5 Relationship between fiscal policy and health care:......................................................17
2.6 Literature Gap:...............................................................................................................18
CHAPTER THREE: RESEARCH METHEDOLOGY...........................................................19
3.1 Introduction:...................................................................................................................19
3.2 Method Outline:.............................................................................................................19

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3.3 Research Onion:.............................................................................................................19
3.4 Research Philosophy:.....................................................................................................20
3.5 Research Approach:.......................................................................................................21
3.6 Research Design:............................................................................................................21
3.7 Data Collection Method:................................................................................................21
3.8 Data Sampling:...............................................................................................................22
3.9 Data analysis Plan:.........................................................................................................22
3.10 Ethical Consideration:..................................................................................................22
3.11 Limitation of the data collection method:....................................................................22
3.12 Summary:.....................................................................................................................23
CHAPTER FOUR: RESULT...................................................................................................24
4.1 Descriptive Statistics......................................................................................................24
4.2 Tests for equality............................................................................................................26
4.3 Correlation analysis............................................................................................................29
4.4 Regression Analysis.......................................................................................................32
CHAPTER FIVE: DISCUSSION............................................................................................37
5.1 Hypothesis 1: Evaluating Relation between government expenditure and economic
growth......................................................................................................................................37
5.2 Hypothesis 2: Evaluating Relation between government expenditure and economic adult
literacy rate...............................................................................................................................38
5.3 Hypothesis 3: Evaluating Relation between government expenditure and life expectancy
at birth......................................................................................................................................39

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CHAPTER SIX: CONCLUSION AND RECOMMENDATION...........................................41
6.1 Conclusion:....................................................................................................................41
6.2 Recommendations:.........................................................................................................42
References:...............................................................................................................................43
Appendix..................................................................................................................................50

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CHAPTER ONE: INTRODUCTION
1.1 Introduction:
The fiscal policy plays a significant role in the long-run growth process and consequently
becomes the central topic of macroeconomics after the occurrence of endogenous growth
models. Therefore, economists have discussed various types of fiscal policies, which act as
the chief driver of balanced growth1. The international economies have grown significantly
over the years through experiencing huge dynamics. These dynamic economies have also
influenced people based on welfare and standard of living. The governments of these
concerned countries have taken significant role to take proper policies based on this dynamic
growth for facilitating people. In general, the government policies can be divided into two
headings, which as, monetary policy and fiscal policy. Monetary policy deals with financial
as well as monetary aspects of the economy while fiscal policies consider investment,
consumption and public expenditures as well as their implications on society.
Considering this impact under consideration, the paper intends to observe the impact of
fiscal policies on economic growth of various countries. Moreover, to analyse the impact of
welfare of fiscal policies, the paper also intends to focus on public health as well as education
of these countries. For doing so, the paper especially selects some countries of the European
Union.
1.2 Background of the study:
Fiscal policies stimulate economic growth, inflation, employment, macroeconomic stability,
government expenditure and other macroeconomic variables. The effective fiscal policy
brings more macroeconomic stability across the country compared to monetary one2. This can
be seen accurately in the area of European Union that consists with sovereign countries.
1 Chau, Wong Hong. "Public Expenditure in a Simple Model of Economic Growth: The Case of Malaysia." Journal of Research in
Business, Economics and Management 8, no. 7 (2017): 1605-1616.
2 Mauro, Paolo, and Jan Zilinsky. "Fiscal Tightening and Economic Growth: Exploring Cross-Country Correlations." Policy Brief (2015):
15-15.

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These countries maintain their individual fiscal policies. Monetary policies or exchange rate
policies do not take any responsibilities to overcome any economic shocks in these countries
of the European Union. Thus, economic growth of these European countries heavily depends
on fiscal policies3. To achieve economic growth through implementing these policies, the
government can encourage aggregate demand or economic supply both in short-run and long-
run. Keynes inspired this demand side equation through considering improvement of
economic growth and reduction of unemployment4. In this context, the government stimulates
aggregate demand through imposing expansionary fiscal policy. This particular form of fiscal
policy reduces taxes and increases government expenditure5. According to economists, the
government could prefer increasing government expenditure compare to tax reduction. This
is because the multiplier of government expenditure provides higher value compare to the tax
change6. On the contrary, supply-side economics also considers fiscal power to control
recession within country7. In this situation, the government prefers to reduce various types of
taxes, such as profit tax, income tax and interest tax and so on.
Therefore, this theoretical model helps a researcher to construct a relationship between fiscal
policy and economic growth, based on endogenous growth model8. According to some
researchers, public spending can influence labour productivity as well as economic growth
through developing health care and accumulation of knowledge9. Other researchers have
observed a positive relationship between economic growths with schooling10. In this context,
3 Baker, Scott R., Nicholas Bloom, and Steven J. Davis. "Measuring economic policy uncertainty."
The Quarterly Journal of
Economics 131, no. 4 (2016): 1593-1636
4 McCombie, John, and Anthony Philip Thirlwall.
Economic growth and the balance-of-payments constraint. Springer, 2016.
5 Gadenne, Lucie. "Tax me, but spend wisely? Sources of public finance and government accountability." American Economic Journal:
Applied Economics 9, no. 1 (2017): 274-314.
6 Magazzino, Cosimo, Lorenzo Giolli, and Marco Mele. "Wagner's Law and Peacock and Wiseman's Displacement Effect In
European Union Countries: A Panel Data Study." (2015).
7 Dosi, Giovanni, Giorgio Fagiolo, Mauro Napoletano, Andrea Roventini, and Tania Treibich. "Fiscal and monetary policies in
complex evolving economies."
Journal of Economic Dynamics and Control 52 (2015): 166-189.
8 Laeven, Luc, Ross Levine, and Stelios Michalopoulos. "Financial innovation and endogenous growth."
Journal of Financial
Intermediation 24, no. 1 (2015): 1-24.
9 Heimberger, Philipp, and Jakob Kapeller. "The performativity of potential output: Pro-cyclicality and path dependency in
coordinating European fiscal policies." Review of International Political Economy 24, no. 5 (2017): 904-928.
10 Masum, Fahria, Liza Groenendijk, Reinfried Mansberger, and Audrey Martin. "Enhancing the role of surveyors: bridging the
gap between demand for and supply of professional education." In
Proceedings of FIG working week 2017: Surveying the world
of tomorrow: from digitalisation to augmented reality, 29 May-2 June 2017, Helsinki, Finland. International Federation of
Surveyors (FIG), 2017.

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other researchers argue that increasing public investment in education sector helps the
concerned economy to generate more human capital11. This large number of human capital
further can help the country to produce more output. On the contrary, other scholars say that
education can only help the concerned economy through research and development12. Thus, it
does not play any significant role in the manufacturing sectors of the economy. Moreover, the
researcher also argues that increasing expenditures on health care can reduce sickness and
absenteeism and consequently improves standard of living of labours13.
Therefore, based on these previous studies the researcher has obtained various
relationships between fiscal policy and economic growth, health care and education. Some
researchers have stated a strong relationship between these factors whole others have stated
only normal relationships.
Keeping above-mentioned contradictory statements in mind, the paper chiefly focuses
on the effect of fiscal policy through analysing economic growth, health care and education.
The entire research work considers countries of European Union, due to significant impact of
fiscal policy over the countries during a certain period of time.
1.3 Research Aims:
Through discussing the impact of fiscal policy on economic growth, health care and
education, the paper chiefly intends to analyse the impact of this policy on ten countries of
the European Union. These countries are Austria, Belgium, Denmark, France, Germany,
Italy, Netherland, Spain, Sweden and the UK. Moreover, the paper also intends to understand
the condition of public health and education before implementing fiscal policy and after
implementing fiscal policy. Through conducting this research the paper can understand the
11 Deming, W. Edwards. The new economics for industry, government, education. MIT press, 2018.
12 Fitzsimons, Patrick. "Human capital theory and education." In Encyclopedia of educational philosophy and theory, pp. 1-4. Springer
Singapore, 2015.
13 Israel, Sabine. "How social policies can improve financial accessibility of healthcare: a multi-level analysis of unmet medical need in
European countries." International journal for equity in health 15, no. 1 (2016): 41.

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importance of fiscal policies on various aspects of an economy. For this, the paper selects
data from two years, which are, 1980 and 2014.
1.4 Research Objectives:
To know the impact of fiscal policy on EU countries, the paper set some research objectives.
These research objectives further can help the concerned researcher to make some research
questions through analysing which the paper can obtain its desired outcome. The paper also
analyses historical data regarding fiscal policy implementation in these ten countries. These
crucial research objectives are:
 To analyse various aspects of fiscal policies taken by the government of the chosen
ten EU countries
 To know the impact of fiscal policies on economic growth of these countries of the
European Union
 To analyse the effects of fiscal policies on the condition of life expectancy of birth of
these concerned countries
 To examine the effects of fiscal policies on adult literacy rate of citizens of these
selected countries
 To analyse historical data on life expectancy and adult literacy rate to understand the
impact of fiscal policies on these countries
1.5 Research Questions:
Based on proposed research aims and objectives, the researcher forms some research
questions. Through answering these questions, the paper can obtain its desired outcome. The
primary research question is:
 How do fiscal policies, implemented by the government of these ten European
countries, influence the economy, public health and education over there?

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To answer this primary question, the paper set some secondary research questions. These
questions are:
 How has the public expenditure of these selected ten European countries affected
economic growth over there?
 How has the specified expenditure influenced public health through stimulating
economic growth?
 How have the government expenditures regarding economic growth of these ten
European countries affected the educational attainment of people of these countries?
1.6 Problem statement:
Thus, the main problem of this research paper is to analyse the effect of fiscal policies on
ten selected countries of European Union. The paper chiefly highlights the issue of economic
growth, public health and education that can be changed with the help of public investment.
1.7 Rationale of the study:
Through obtaining the desired outcome, this research paper can state the actual role of fiscal
policy as an engine of growth. Moreover, this research work can further help economists to
understand the impact of fiscal policy on social welfare. Based on the direction of the
outcome, the paper can understand that whether implanting fiscal policy is good for health or
not.
1.8 Research hypothesis:
To conduct the research work statistically, the paper needs to set some research hypothesis.
In this paper, the researcher has selected three main research hypotheses. In every part, the
researcher set a null hypothesis (H0) and an alternative hypothesis (H1), which are mentioned
as follow:

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H1: Relationship between fiscal policies and economic growth in selected ten countries
of European Union
H10: Fiscal policy does not influence economic growth of chosen ten countries in EU
H11: Fiscal policy influences economic growth of chosen ten countries in EU
H2: Relationship between fiscal policies and education in selected ten EU countries
H20: Fiscal policy does not influence adult literacy rate in selected 10 European countries
H21: Fiscal policy influences adult literacy rate in selected 10 European countries
H3: Relationship between fiscal policy and Life expectancy in mentioned countries of
the EU
H30: Fiscal policy does not influence life expectancy in ten selected countries of the EU
H31: Fiscal policy influences life expectancy in ten selected countries of the EU
1.9 Structure of the study:
The entire research work is divided into various segments through an organised way. Thus
the paper has selected a structural framework as shown below:

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Figure 1: Structure of entire dissertation
Source: (created by author)
The first chapter is an introduction that provides a brief overview of the research work
through discussing the background of the study. This chapter also forms research aims,
objectives and questions through solving which the paper can obtain its desired outcome. The
second chapter focuses on previous research works, literature and other scholarly articles.
This chapter can help the concerned researcher to understand the importance of fiscal policy
and its effects on economic growth, health care and education of EU countries. The third
chapter considers research methodology. This chapter provides a research framework
considering research approaches, technologies, data collection and analysis procedure based
on the concerned topic. The fourth chapter provides outcome of the entire research work. The
last chapter discusses the entire paper briefly along with its limitations and other possible
recommendations.
Chapter 1:
Introduction
Chapter 2:
Literature Review
Cahpter 3:
Research
Methodology
Chapter 4: Results
Chapter 5:
Discussion
Chapter 6:
Conclusions and
Recommendations

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CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction:
This section will discuss previous research articles that have considered various aspects of
fiscal policies and its implications on economic growth, health care and education. This
chapter has been divided into different sections stating the impact of fiscal policies in
different countries across the world.
2.2 Concept of fiscal policy and its important:
Fiscal policies are the form of economic policies that the government of a country designs
and implements to maintain and control expenditure as well as taxes of an economy14. As per
requirement, the government can take expansionary or contractionary fiscal policies though
changing the direction of both expenditures and taxes. This in turn can influence economic
growth of a country significantly. In this context, it is essential to discuss importance of fiscal
policies based on economic concept15. Through implementing proper fiscal policies, the
government intends to change its economic condition for managing stable condition. The
government of a country takes such policies to stimulate economic growth and increase total
welfare of the citizens16. Government expenditures mainly help an economy to growth
through fulfilling some basic requirements of people such as health and education.
In every country, government expenditure is based on certain principles such as canon of
benefit, canon of economy and canon of sanction17. The fiscal policy of a country also
depends on canon of surplus. The government implements this expenditure in such a way that
it can maximise social benefits. Moreover, this government expenditure can lead the
14 Braun, Dietmar. Fiscal policies in federal states. Routledge, 2018.
15 Baker, Scott R., Nicholas Bloom, and Steven J. Davis. "Measuring economic policy uncertainty." The Quarterly Journal of
Economics 131, no. 4 (2016): 1593-1636.
16 d’Agostino, Giorgio, J. Paul Dunne, and Luca Pieroni. "Government spending, corruption and economic growth." World Development 84
(2016): 190-205.
17 Chowdhury, Samia Tarannum. "Is Bangladeshi Professionals’ Tax-Paying Behavior in Convergence with the Principles of
Taxation?." Research in World Economy 6, no. 3 (2015): 55.

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country’s economic condition towards an efficient, productive and sustainable one18. Canon
of sanction states that government spends money after authorised sanction. In addition to this,
the government set budget intending that it can earn surplus.
2.3 Impact of public expenditure on economic growth:
According to economists, public expenditure influences economic growth of a country
positively. Keynes, Wagner, Peacock and Wiseman have established well-known theories
related to economic growth. Keynes forms a relationship between public expenditure and
economic growth and implies public sector expenditure as an exogenous factor19. Moreover,
he states that public expenditure is a tool that can increase national income. This in turn leads
the economy to grow further. In addition to this, Wagner, Peacock and Wiseman as well as
other economists have constructed other theories focusing on the relationship of these two
factors20. According to Wagner, public sector expenditure acts as a behavioural variable for a
growing economy. On the contrary, Solow states that fiscal policy does not influence a
country’s national output21. Other economists, who follow the models of endogenous growth,
have argued that fiscal policies plays significant role to determine economic growth.
To understand the impact of government expenditure on economic growth, researchers have
conducted many empirical analyses. For different research works, researchers have selected
different countries as sample22. Through analysing this impact, some researchers have
observed that government expenditure has a negative implication of real output. On the
contrary, other researchers have done the Granger causality test to examine the relationship
these economic factors in Thailand23. The outcome represents that public expenditure and
18 Chu, Steven, Yi Cui, and Nian Liu. "The path towards sustainable energy." Nature materials 16, no. 1 (2017): 16.
19 Arestis, Philip, Fernando Ferrari Filho, and Fábio Henrique Bittes Terra. "Keynesian Macroeconomic Policy: Theoretical Analysis and
Empirical Evidence." Panoeconomicus 65, no. 1 (2018): 1-20.
20 YINUSA, Dauda Olalekan, and Adebayo ADEDOKUN. "Fiscal Synchronisation or Institutional Separation: An Examination of Tax-
Spend Hypothesis in Nigeria." Journal of Finance 5, no. 3 (2017): 80-87.
21 Elmendorf, Douglas W., and Louise M. Sheiner. "Federal budget policy with an aging population and persistently low interest
rates." Journal of Economic Perspectives 31, no. 3 (2017): 175-94.
22 Burlon, Lorenzo. "Public expenditure distribution, voting, and growth." Journal of Public Economic Theory 19, no. 4 (2017): 789-810.
23 Bedir, Serap. "Healthcare expenditure and economic growth in developing countries." Advances in Economics and Business4, no. 2
(2016): 76-86.

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economic growth do not integrate with each other. However, the outcome represents that
public expenditure has a positive impact on economic growth24. In other empirical studies,
researchers have chosen OECD countries for the period 1970 to 2005. Through using
regression analysis, this paper has observed that government expenditure and economic
growth has a long-term relationship25. In another research work, based on the United States, a
casual relationship between national income and public expenditure can be observed26. This
casual outcome states that total public expenditure helps the country to improve its national
income while the later one does not influence public expenditure. In other research work,
researchers have collected data from Greece, Ireland and the United Kingdom to analyse the
relationship of government expenditure with economic growth27. According to their outcome,
size of the government has influenced economic growth of these three countries. In this
analysis, researchers have selected inflation as a control variable. Their analysis has stated
that economic growth has increased public expenditure in the UK and Greece during the
period of inflation.
2.4 Impact of public expenditure on education:
The recent literature articles provide a special emphasis on educational attainment. This is
because education can help an economy to obtain more efficient labours and this in turn
increases per capita income of the country28. Therefore, researchers have suggested that
education is an essential factor to create human capital formation as well as economic
24 Olulu, Robinson Monday, Eravwoke Kester Erhieyovwe, and Ukavwe Andrew. "Government expenditures and economic growth: The
Nigerian experience." Mediterranean Journal of social sciences 5, no. 10 (2014): 89.
25 Cournède, Boris, and Oliver Denk. "Finance and economic growth in OECD and G20 countries." (2015).
26 Gόrnicka, Lucyna, Christophe Kamps, Gerrit Koester, and Nadine Leiner-Killinger. "What did forecasters learn during the European
sovereign debt crisis about the impact of fiscal policies on economic growth?." Research Bulletin 49 (2018).
27 Addison, Tony, Miguel Niño Zarazúa, and Jukka Pirttilä. "Fiscal policy, state building and economic development."‐ Journal of
International Development 30, no. 2 (2018): 161-172.
28 Yeager, Tim. Institutions, transition economies, and economic development. Routledge, 2018.

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growth29. Therefore, government needs to invest sufficient amount of money in this sector. In
this context, public expenditure plays a crucial role to influence economic growth.
Through public expenditure, the government of a country conducts many economic
activities and spends sufficient money for education is considered as one of these major
activities. Developing entire educational system is essential for the country, as this process
can help the country to develop socio-economic aspects30. Moreover, proper training as well
as education helps the country to maintain equalisation among citizens. Therefore, education
has significant contribution to progress a society. Therefore, spending in educational sector is
considered as a principle objective for policy makers as well as state authorities31. This can be
seen in the European Union, as well. Consequently, they provide training for stimulating the
development of present economy along with the knowledge society. After adopting the
Lisbon Strategy in 2000, the European Union has obtained momentum in training and
education policies32. This strategy can be called as a comprehensive one that has aimed to
transform the European Union into a dynamic and competitive economy.
The funding system of the government in educational system can be observed in the context
of America. It is observed that the government has provided sufficient amount for higher
education of the country. For instance, during 1987 to 2012, the federal government has spent
more than 65 percent in educational sector33. The government invests money for different
prospects, such as, helping students and funding specific research projects. Moreover, the
government spends funds for general operations. However, the great financial recession of
the year 2007 led the country to experience huge struggle.
29 van Esch, Emmy, Li Qun Wei, and Flora FT Chiang. "High-performance human resource practices and firm performance: The mediating
role of employees’ competencies and the moderating role of climate for creativity." The International Journal of Human Resource
Management 29, no. 10 (2018): 1683-1708.
30 Lim, David. Quality Assurance in Higher Education: A Study of Developing Countries: A Study of Developing Countries. Routledge,
2018.
31 Percy, Stephen L. Disability, civil rights, and public policy: The politics of implementation. University of Alabama Press, 2018.
32 Gunn, Andrew, and Michael Mintrom. "Higher education policy change in Europe: Academic research funding and the impact
agenda." European Education 48, no. 4 (2016): 241-257.
33 Peters, B. Guy.
American public policy: Promise and performance. Cq Press, 2018.

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Figure 1: Inflation-adjusted government expenditure of Federal Government34
However, researchers sometimes have observed that expenditure on educational sector does
not always bring good outcomes for the government35. In this context, education economists
have observed that governance blockages could force educational outcome to become a poor
one.
2.5 Relationship between fiscal policy and health care:
To obtain economic growth, it is essential to maintain good health condition among citizens.
Thus, spending for health care sector is also considered as an important issue of the
government36. Based on this concept, governments of many countries allocate budget
significantly for health sector. However, developing countries like Nigeria have failed to
34 Liebman, Jeffrey B., and Neale Mahoney. "Do expiring budgets lead to wasteful year-end spending? Evidence from federal
procurement." American Economic Review 107, no. 11 (2017): 3510-49.
35 Deming, W. Edwards. The new economics for industry, government, education. MIT press, 2018.
36 Reeves, Aaron, Martin McKee, Sanjay Basu, and David Stuckler. "The political economy of austerity and healthcare: Cross-national
analysis of expenditure changes in 27 European nations 1995–2011." Health policy 115, no. 1 (2014): 1-8.

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obtain desired outcome from this health sector37. Several economists relating to endogenous
growth models make a link between public expenditure and long-term growth of the
economy. In this context, some researchers have intended to find a relationship between
economic growth and government expenditure38. Especially, researchers have analysed a
relationship between heath outcomes and sectoral government expenditure like public health
care. For analysing this data, researchers have selected many countries for the last few
decades to understand the actual impact of public health in the context of macroeconomics39.
Researchers consider choices of households based on education and health expenditure.
To understand relationship between government and health care, some researchers focus on
governance indicators like accountability, violence, voice and political stability40. These
indicators have represented a negative implication on infant mortality. Similarly, researchers
have observed that high corrupted countries have comparatively higher infant and child
mortality rates41. Moreover, it is also observed that countries with high corruption have
invested more capital in housing and physical sectors instead of health care.
2.6 Literature Gap:
Through discussing previous literatures, the paper understands various implications of
public expenditure on education and health care. However, the paper has obtained very
limited research works that consider the European countries. To understand the impact of
fiscal policy on economic growth of these European countries, the paper selects 10 countries.
37 Moorhead, Sue, Marion Johnson, Meridean L. Maas, and Elizabeth Swanson. Nursing Outcomes Classification (NOC)-E-Book:
Measurement of Health Outcomes. Elsevier Health Sciences, 2018.
38 Hein, Eckhard. "Autonomous government expenditure growth, deficits, debt, and distribution in a neo-Kaleckian growth model." Journal
of Post Keynesian Economics (2018): 1-23.
39 Bacigalupe, Amaia, Faraz Vahid Shahidi, Carles Muntaner, Unai Martín, and Carme Borrell. "Why is there so much controversy
regarding the population health impact of the great recession? Reflections on three case studies." International Journal of Health
Services 46, no. 1 (2016): 5-35.
40 Mugisha, James, Joshua Ssebunnya, and Fred N. Kigozi. "Towards understanding governance issues in integration of mental health into
primary health care in Uganda." International journal of mental health systems 10, no. 1 (2016): 25.
41 Musafili, Aimable, Birgitta Essén, Cyprien Baribwira, Agnes Binagwaho, Lars-Åke Persson, and Katarina Ekholm Selling. "Trends and
social differentials in child mortality in Rwanda 1990–2010: results from three demographic and health surveys." J Epidemiol Community
Health (2015): jech-2014.

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CHAPTER THREE: RESEARCH METHEDOLOGY
3.1 Introduction:
In this chapter, the researcher highlights various forms of research approaches along with
research designs and strategies. Through doing so, the concerned person can successfully
derive appropriate outcomes based on the analysis. In addition to this, through selecting
specific methodology for research, the concerned person can maintain sustainability of the
received data in order to receive effective outcomes. However, identification of proper
research methodology does not give any outcomes. Instead of this, identification of proper
research methodology can lead the concerned person to select a specific way that further
helps researcher to get authenticity and reliability regarding this specified research topic.
3.2 Method Outline:
In this section, the concerned researcher highlights aims of research methodology. Through
using proper research techniques, the researcher can obtain specific outcomes. With the help
of positivism philosophy, the paper intends to determine actual research process42. Moreover,
this paper also considers deductive research method for analysing the data efficiently.
According some researchers, deductive approach leads a researcher to obtain actual as well as
accurate outcomes43. On the contrary, other researchers have stated that deductive approach
does not provide authentic outcomes through manipulating available data. The researcher also
uses explanatory research for fulfilling desired objectives.
3.3 Research Onion:
Research onion of research methodology plays a significant role for using popular research
tools in an efficient way. Through using research onion, the research intends to obtain
effective outcomes for the particular research. The researcher obtains six layers, which can be
42 Hughes, John A., and Wes W. Sharrock. The philosophy of social research. Routledge, 2016.
43 Pearl, Judea. "The deductive approach to causal inference." Journal of Causal Inference 2, no. 2 (2014): 115-
129.

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linked directly with research process along with research techniques. Moreover, to implement
effective research strategies, the researcher uses this research onion. This concept also helps
the researcher to design research philosophy as well as time horizon.
Figure 1: Research Onion
3.4 Research Philosophy:
Research philosophy helps the concerned researcher to recognise the essence of the study
through using various effective research paradigms. In this paper, the research considers
positivism philosophy, based on the reality. Therefore, scientifically proven techniques are
selected in this research philosophy. The present research topic intends to understand the
impact of fiscal policy o various aspects of a country. Therefore, the concerned researcher
tries to analyse the actual outcome of government expenditure on economic growth, life
expectancy and adult literacy rate. For this, the paper relates theories as well as concepts
stated in literature review with present scenario.

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3.5 Research Approach:
Research approach is an essential part of entire research methodology with the help of
which the study can obtain its desired outcome. Two types of research approach can be
observed while the paper uses deductive research approach. The researcher, in this context,
uses quantitative research approach for analysing the data.
3.6 Research Design:
Research design guides a researcher to obtain certain goals depending on the research
objectives. In this paper, the researcher has selected exploratory research design, which
highlights different research issues relating to research problems44. In addition to this, using
descriptive research design, the researcher tries to explore various problems and issues
related to specified research paper. Thus, this process chiefly helps the concerned researcher
to obtain an opportunity for expanding knowledge base as well as understanding. The present
paper focuses on the impact of fiscal policies in economic growth along with education and
health of ten selected European Countries45. Hence, this research paper analyses factors in
detains for understanding the actual impact of fiscal policies, especially, government
expenditure. In addition to this, the paper also focuses to provide further recommendations to
minimise problems related to this research work. For doing so, the researcher uses descriptive
research design.
3.7 Data Collection Method:
Analysing data is the primary requirement of a research work. Data can be collected from
primary sources or secondary sources. In this paper, the researcher collects secondary
quantitative data of economic growth, life expectancy and adult literacy rate to analyse the
44 Ioannidis, John PA, Sander Greenland, Mark A. Hlatky, Muin J. Khoury, Malcolm R. Macleod, David Moher, Kenneth F. Schulz, and
Robert Tibshirani. "Increasing value and reducing waste in research design, conduct, and analysis." The Lancet383, no. 9912 (2014): 166-
175.
45 O'connor, James. The fiscal crisis of the state. Routledge, 2017.

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impact of fiscal policy on these sectors46. Moreover, the analysis collects data of inflation and
unemployment. These two act as control variables in this analysis.
3.8 Data Sampling:
To understand the impact of fiscal policy, the researcher considers ten countries of European
Union. These countries are Austria, Belgium, Denmark, France, Germany, Italy, Netherlands,
Spain, Sweden and the UK. To understand the impact of fiscal policy the research paper
collects historical data when this policy was not implemented and the year when this policy
was implemented. In 1980, the government did not implement any policy while in 2014 such
policy was implemented in these European Countries.
3.9 Data analysis Plan:
The data has been obtained through using various techniques of analysis. Selecting of proper
analytical techniques is essential to obtain accurate conclusion. Moreover, this technique
helps the entire research work to interpreting the data. The concerned researcher will use
Eviews to solve this entire analysis after collecting data in excel sheet.
3.10 Ethical Consideration:
The researcher tries to maintain research ethics at the time of conducting this research
process. In this context, the researcher collects data from various authentic sources for
obtaining accurate information.
3.11 Limitation of the data collection method:
The data has been collected from secondary sources to collect information. Thu it would be
impossible for the research to understand any errors in this data. Others can manipulate
secondary data and consequently the data could be hampered.
46 Williams, Trenton A., and Dean A. Shepherd. "Mixed method social network analysis: Combining inductive concept development,
content analysis, and secondary data for quantitative analysis." Organizational Research Methods 20, no. 2 (2017): 268-298.

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3.12 Summary:
Research methodology tries to identify different research methodologies with the help of
which the concerned researcher can conduct the entire analysis. This paper collects
positivism as well as deductive approach along with descriptive research design. The paper
collects secondary quantitative data for obtaining the actual outcome.

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HEALTH AND EDUCATION
CHAPTER FOUR: RESULT
4.1 Descriptive Statistics
Descriptive statistics indicate the measures of mean, median, mode, standard deviation and
others to understand nature of the distribution47. The table below presents descriptive
statistics of economic growth, adult literacy rate, life expectancy at birth and government
expenditure in the year 2014. The descriptive statistics for the selected ten countries are
presented for the year 2014.
Table 1: Descriptive Statistics after the fiscal regime
From table 1, the average economic growth rate for the ten selected nations is
obtained as 1.39. That means the countries on an average grew at a rate of 1.39 percent
during 2014. The standard deviation for economic growth is obtained as 0.78. The standard
deviation is lower than the average growth rate. This implies economic growth does not vary
much among the ten nations. The highest economic growth recorded as 2.60 and the lowest
economic growth was accounted as 0.11.
The average adult literacy rate for the ten selected nations is obtained as 97.40. That means
the countries on an average has an adult literacy rate of 97.40 percent during 2014. The
47Cox, David Roxbee. Applied statistics-principles and examples. Routledge, 2018.

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standard deviation for adult literacy is obtained as 4.98. The standard deviation is lower than
the average growth rate. This implies adult literacy does not vary much among the ten
nations. The highest and the lowest adult literacy recorded as 99 percent and 83 percent
respectively.
The summary statistics in table 1 suggests that the average years of Life expectancy at birth
rate for the selected countries are 82 years. That means the countries on an average life
expectancy of 82 years during 2014. The standard deviation for Life expectancy at birth is
0.86. The relatively lower standard deviation reflects that the years of life expectancy at birth
is less volatile among the selected countries. The maximum years of Life expectancy at birth
is obtained as 83years while the minimum years of life expectance is closely equal to 81
years.
The average share of government expenditure in GDP for the ten selected nations is
obtained as 49.93. The government expenditure thus constitute a considerable share of GDP
of the selected nations in 2014. The standard deviation of share of government expenditure in
GDP is obtained as 5.15. The standard deviation is lower than the average growth rate. This
implies share of government expenditure does not vary much among the ten nations. The
highest and lowest share of government expenditure is recorded as 57 percent and 43 percent
respectively.
Table 2: Descriptive Statistics before the fiscal regime
ECONOMIC_G
ROWTH_PREF
ISCA
EDUCATION_P
REFISCAL
HEALTH_PREF
ISCAL
Mean 1.534243 97.67000 74.09535
Median 1.644080 98.30000 73.99720
Maximum 4.444054 99.00000 75.74317
Minimum -2.027769 92.80000 72.46341
Std. Dev. 1.807240 1.917782 1.185957
Skewness -0.429429 -1.796918 0.205718
Kurtosis 3.036327 5.257985 1.807480
Jarque-Bera 0.307899 7.505899 0.663077
Probability 0.857315 0.023448 0.717819
Sum 15.34243 976.7000 740.9535

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Sum Sq. Dev. 29.39505 33.10100 12.65844
Observations 10 10 10
The summary statistics in table 2 suggests that average economic growth among the
countries in 1980 was 1.53 percent. That means the countries on an average grew at a rate of
1.53 percent during 1980. The standard deviation for economic growth is obtained as 1.80.
The standard deviation is lower than the average growth rate. This implies economic growth
does not vary much among the ten nations. The highest economic growth in the regime was
4.44 percent and the lowest economic growth was accounted as -2.02.
The average adult literacy rate for the ten selected nations is obtained as 97.67. That means
the countries on an average has an adult literacy rate of 97.67 percent during 1980. The
standard deviation for adult literacy is obtained as 1.91. The standard deviation is lower than
the average growth rate. This implies adult literacy did not vary much among the ten nations.
The highest and the lowest adult literacy during this year was recorded as 99 percent and 92
percent respectively.
From table 2, the average years of Life expectancy at birth rate for the selected countries is
74 years. That means the countries on an average life expectancy of 74 years during 1980.
The standard deviation for Life expectancy at birth is 1.18. The relatively lower standard
deviation reflect that the years of life expectancy at birth is less volatile among the selected
countries. The maximum years of Life expectancy at birth is obtained as 75 years while the
minimum years of life expectance is closely equal to 72 years.
4.2 Tests for equality
t test has been conducted to analyze whether there is any significant difference in economic
growth, health and education before and after the fiscal regime48.
Table 3: Test for equality of mean growth
48Bickel, Peter J., and Kjell A. Doksum. Mathematical statistics: basic ideas and selected topics, volume I. Vol. 117. CRC Press, 2015.

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From the result of t test, the p value is obtained as 0.82. The p value is higher than the
significance value of 0.05. Therefore, the null hypothesis stating no significant difference
between average growth rate between 1980 and 2014 is accepted. The mean growth rate in
the pre and post fiscal regime thus is not significantly different.

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Table 4: Test for equality of mean literacy rate
The p value is obtained as 0.8760. The p value is larger than 5% significance level.
Therefore, the null hypothesis stating no significant difference between average literacy rate
between 1980 and 2014 is accepted. The average adult literacy rate after the fiscal policy thus
is not significantly different from that in pre-fiscal regime.

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Table 5: Test for equality of mean life expectancy
The p value is obtained as 0.0000. The p value is smaller than significant value of 0.05. As
the p value is lower than the significant value, the null hypothesis of no significant difference
in average years of life expectancy between 1980 and 2014 is rejected. It can therefore be
said that average years of life expectancy is significantly different from in post fiscal regime
compared to that in pre fiscal era.
4.3 Correlation analysis
The correlation matrix presented below shows the association between economic growth,
adult literary and life expectancy and government expenditure49.
49Wiley, Joshua F., and Larry A. Pace. "Correlation and Regression." In Beginning R, pp. 121-137. Apress, Berkeley, CA, 2015

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Table 6: Correlation matrix
The analysis of correlation is important to find out whether the independent
variables in the regression model suffer from the problem of multicollinearity. In the
regression analysis multicollinearity arises when two or more independent variables are
correlated with each other. The objective of regression analysis is to identify the specific
relationship between the dependent and independent variables. If the independent variables
are related to each other, then change in one variable likely to cause a change in independent
variables. This makes it difficult to estimate the actual relation between the dependent and
each of the independent variables. Higher the degree of correlation more severe is the
problem of multicollinearity.
As obtained from the correlation matrix, government expenditure has a positive
association with health and education. The obtained correlation coefficient between
government spending and adult literacy and life expectancy are 0.35 and -0.24 respectively.
Government spending thus has a positive association with adult literacy while spending has a
negative association with life expectancy. The larger value of correlation coefficient between
government expenditure and adult literacy indicate that association between government

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HEALTH AND EDUCATION
spending and adult literacy is much stronger relative to that between government expenditure
and health status. However, for both the variables, there is week degree of association. The
correlation coefficient between government expenditure and economic growth is -0.30. The
negative correlation coefficient indicates that government expenditure in these nations has an
inverse association between government spending and economic growth. The problem of
multicollinearity however is not severe as the obtain correlation among the independent
variables are relatively weak.

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4.4 Regression Analysis
Table 7: Regression result between economic growth and government expenditure
From the regression result, value of R square is obtained as 0.09. That is government
expenditure can explain only 9 percent variation economic growth in 2014. The regression
coefficient for government expenditure is -0.0454. The negative coefficient suggests an
inverse relation between share of government expenditure and economic growth of the
nations. The obtained p value for the coefficient is 0.3975. As the p value is higher than
significant level, the null hypothesis of no significant relation between government
expenditure and economic growth is accepted50. Government expenditure thus do not found
to have any significant influence on economic growth.
50Chatterjee, Samprit, and Ali S. Hadi. Regression analysis by example. John Wiley & Sons, 2015.

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Table 8: Regression result between economic growth and government expenditure using
the control variable
In the above regression analysis, inflation and unemployment are considered as control
variables. After inclusion of unemployment and inflation, the value of R square increases to
0.42. The three combined variables together can explain 42 percent variation in economic
growth. The coefficient of share of government expenditure remains negative and
insignificant. The control variables therefore do not have any significant effect in the model.
Table 9: Regression result between life expectancy at birth and government expenditure

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The value of R square for the model is obtained as 0.05. That is government
expenditure can explain only 5 percent variation life expectancy at birth in 2014. The
regression coefficient for government expenditure is -0.0409. The negative coefficient
suggests an inverse relation between share of government expenditure and life expectancy at
birth in the selected nations. The obtained p value for the coefficient is 0.4956. As the p value
is higher than significant level, the null hypothesis of no significant relation between
government expenditure and years of life expectancy at birth is accepted. Government
expenditure thus do not found to have any significant influence overall status of health in
selected economies.
Table 10: Regression result between economic growth and government expenditure
using control variable
In the new regression model, inflation and unemployment are considered as control
variables. After inclusion of unemployment and inflation, the value of R square increases to
0.51. This implies government expenditure along with inflation and unemployment can
explain 51percent variation in years of life expectancy. The coefficient of share of
government expenditure in GDP remains negative and insignificant. The effect of inflation on

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FISCAL POLICIES ON ECONOMIC GROWTH AND ITS EFFECTS ON PUBLIC
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life expectancy at birth years is negative whole and effect of unemployment on the same is
positive. Neither of the control variables are statistically significant. The control variables
therefore do not have any significant influence in the model.
Table 11: Regression result between life expectancy at birth and government
expenditure
The R square value in the model is 0.12. This implies government expenditure
accounts 12 percent variation in adult literacy rate of these nations in 2014. The regression
coefficient for government expenditure is 0.3373. The positive regression coefficient for
government expenditure suggests a positive relation between share of government
expenditure and adult literacy rate in the selected nations. The obtained p value for the
coefficient is 0.3228. As the p value is higher than significant level, the null hypothesis of no
significant relation between government expenditure and years of adult literacy rate is
accepted. Government expenditure thus do not found to have any significant influence overall
status of education in the selected nations.

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Table 12: Regression result between economic growth and government expenditure
using control variable
After inclusion of unemployment and inflation as control variable, the value of R square
increases to 0.89. This implies government expenditure along with inflation and
unemployment can explain 89 percent variation in adult literacy rate. The coefficient for
share of government expenditureremains insignificant. The effect of inflation on adult
literacy rate is negative. The regression coefficient for inflation however is statistically
insignificant. For unemployment, the effect of prevailing unemployment rate on adult literacy
rate is negative and statistically significant. Inclusion of inflation and unemployment in the
existing model also improve overall significance of the model. The model is now statistically
significant compared to the previous model that is statistically insignificant.

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CHAPTER FIVE: DISCUSSION
5.1 Hypothesis 1: Evaluating Relation between government expenditure and economic
growth
The first hypothesis has been framed to analyze the relation between government
expenditure and economic growth. Economic growth of a nation is measured by annual
change in gross domestic product from one year to another51. Gross Domestic Product of a
nation is the sum of expenditures made in a particular accounting year. These expenditures
include consumption expenditure, government expenditure, investment expenditure and net
export. Fiscal policy thus likely to have a positive impact on Gross Domestic Product52. With
increase in government expenditure on different sector, there is a possibility of expansion in
Gross Domestic Product which in turn increases economic growth of a nation. The data from
ten selected nations of European Union however does not support this claim. Analysis
initially found an inverse association between government expenditure and economic growth.
That is increase in share of government expenditure in GDP causes a decline in the economic
growth of these nations. The coefficient however is not statistically significant. That is
government expenditure does not have a statistically significant effect on economic growth53.
Except government expenditure, other significant factor might influence economic growth of
a nation. Two related factors affecting economic growth are inflation and unemployment54.
These two factors are included in the second model to moderate the effect of government
expenditure. Inclusion of inflation and unemployment as control variables do not alter result
51 Furtado C. Economic Development of Latin America. InPromise Of Development 2018 Jan 31 (pp. 124-148).
Routledge.
52Fatas, Antonio, and Ilian Mihov. "Policy volatility, institutions, and economic growth." Review of Economics and Statistics95, no. 2
(2013): 362-376.
53 Samargandi N, Fidrmuc J, Ghosh S. Is the relationship between financial development and economic growth
monotonic? Evidence from a sample of middle-income countries. World Development. 2015 Apr 1;68:66-81.
54Teles, Vladimir K., and Caio Cesar Mussolini. "Public debt and the limits of fiscal policy to increase economic growth." European
Economic Review 66 (2014): 1-15.

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of the older model much. In the mode of economic growth, all the three variables have a
negative effect on economic growth. Nothing can be said firmly as neither of the variables in
the model are statistically significant. The null hypothesis of no significant relation between
economic growth and government expenditure is rejected in both the model. Also, the test of
equality of means suggest that average growth in the pre-fiscal regime is not significantly
different from that in the post fiscal regime. In fact, average growth in 1980 for ten countries
is higher than that in 2014. Government expenditure though have slightly reduced the
volatility in growth but there is no significant effect of government expenditure in terms of
absolute improvement in economic growth.
5.2 Hypothesis 2: Evaluating Relation between government expenditure and economic
adult literacy rate
The state of education in a nation can be understood from adult literacy rate in the nation.
Education plays an important role in economic growth and development of a nation55. In a
nation with low level of education, government considers to investment a significant amount
on improvement of education. Allocation of government’s fund on education sector improves
literacy rate of the nation56.The ten selected EU nations maintained a high adult literacy rate
both in the pre and post fiscal regime. The result of equality of average literacy rate suggests
that average literacy rate in 1980 does not differ significantly from that in 2014. Therefore,
government did not need to spend much on improving literacy rate in these nations. The
assertion is supported by historical data collected on share of government expenditure and
adult literacy rate57. The regression result shows an inverse relation between share of
government expenditure in GDP and adult literacy rate. In the model, the coefficient is not
55 Ballantine JH, Hammack FM, Stuber J. The sociology of education: A systematic analysis. Routledge; 2017
Mar 20.
56Ballantine, Jeanne H., Floyd M. Hammack, and Jenny Stuber. The sociology of education: A systematic analysis. Routledge, 2017.
57 Jackson CK, Johnson RC, Persico C. The effects of school spending on educational and economic outcomes:
Evidence from school finance reforms. The Quarterly Journal of Economics. 2015 Oct 1;131(1):157-218.

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FISCAL POLICIES ON ECONOMIC GROWTH AND ITS EFFECTS ON PUBLIC
HEALTH AND EDUCATION
statistically significant. In order to moderate the effect of government expenditure, a new
model has been developed taking unemployment and inflation as control variables. In the
new model, government expenditure and inflation found to have a negative effect on adult
literacy rate58. In both the model, the coefficient of government expenditure is statistically
insignificant. The null hypothesis of no significant relation between government expenditure
and adult literacy is rejected implying no significant role of fiscal policy in improving
education of the selected nations.
5.3 Hypothesis 3: Evaluating Relation between government expenditure and life
expectancy at birth
In order to evaluate state of health of the nation, data on life expectancy at birth is evaluated.
A significant portion of government earnings is spent for funding health expenditure.
Government expenditure thus likely to have a positive influence on health status of a nation59.
The equality test for average literacy rate suggests that years of life expectancy at birth in pre
fiscal regime differ significantly from that in post fiscal regime60. That means government
expenditure might have a positive influence on years of life expectancy in these nations.
From the regression the coefficient of government expenditure is found to be positive. This
means for the selected EU countries an increase in government expenditure likely to increase
the years of life expectancy. This is due to fact that the government spends a significant
portion on improving health status of people in the nation61. The conclusion however is not
statistically supported as the coefficient isnot statistically significant at 5 percent level of
58 Mundy K, Verger A. The World Bank and the global governance of education in a changing world order.
International Journal of Educational Development. 2015 Jan 1;40:9-18
59Rodríguez-Pose, Andrés, and Enrique Garcilazo. "Quality of government and the returns of investment: Examining the impact of cohesion
expenditure in European regions." Regional Studies 49, no. 8 (2015): 1274-1290
60 Mcintyre D, Meheus F, Røttingen JA. What level of domestic government health expenditure should we
aspire to for universal health coverage?. Health Economics, Policy and Law. 2017 Apr;12(2):125-37.
61Dahl, Espen, and Kjetil A. van der Wel. "Educational inequalities in health in European welfare states: a social expenditure
approach." Social Science & Medicine 81 (2013): 60-69.

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significance. Other two factors that might influence life expectancy are inflation and
unemployment. With increase in inflation people need to a considerable higher income to
support their basic necessities62. This reduces the amount available to spend on health.
Consequently, an inverse relation is obtained between inflation and life expectancy. As
unemployment increase the average income reduces as many people loses their jobs. With a
decline in income less focus can be given on health expenditure. This causes a deterioration
of status of health leading to a decline in life expectancy at birth63. The regression result thus
shows an inverse association between unemployment and life expectancy at birth.
Unemployment is also found to be statistically significant in this model. However, the main
variable of interest that is government expenditure is not statistically significant in either of
the model. The hypothesis of no significant relation between share of government
expenditure and life expectancy year thus is rejected. Hence, fiscal policy does not have any
significant influence on health status of the nations.
62 Bradley EH, Canavan M, Rogan E, Talbert-Slagle K, Ndumele C, Taylor L, Curry LA. Variation in health
outcomes: the role of spending on social services, public health, and health care, 2000–09. Health Affairs. 2016
May 1;35(5):760-8.
63 Dizaji SF, Farzanegan MR, Naghavi A. Political institutions and government spending behavior: theory and
evidence from Iran. International Tax and Public Finance. 2016 Jun 1;23(3):522-49.

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CHAPTER SIX: CONCLUSION AND RECOMMENDATION
6.1 Conclusion:
This chapter of the research paper will conclude the entire analysis briefly. The chief focus
of this research paper is to observe the impact of fiscal policy on economic growth, education
and public health of European countries. For this, the paper has selected 10 countries from
the European Union. These countries are Austria, Belgium, Denmark, France, Germany,
Italy, Netherlands, Spain, Sweden and the United Kingdom. Through using this policy, the
government of a country intends to manage economic condition and sustain economic
stability for long term. For doing so, the government either can change the amount of taxes of
government expenditures based on economic condition. According to economists, the effect
of government expenditure is comparatively high than taxes due to multiplier effect. The
paper has observed that to stimulate economic growth along with other macroeconomic
conditions, the government of these European countries mainly use fiscal policies instead of
monetary one. To understand the impact of this policy, the paper has considered historical
data of 2014 and 1980. In 1980, European countries did not experience any fiscal policies
within their economy. On the contrary, fiscal policies were implemented in 1990 and
onwards due to some reasons. Through comparing these two data based on economic growth,
adult literacy rate and standard of living with government expenditures, the paper intends to
understand the actual impact of fiscal policies. In this context, impact of government
expenditure is considered as depended variable while economic growth, literacy rate and
standard of living are considered as independent variables. Moreover, inflation and
unemployment rate are considered as controlled variables that can affect the collected data
significantly. Outcomes of the entire analysis do not provide any significant relationship of
economic growth and adult literacy between 1980 and 2014. However, life expectancy
represents significant difference between these two years. Thus, null hypotheses for the no

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HEALTH AND EDUCATION
significant relationship between public expenditure and economic growth as well as public
expenditure and literacy rate are accepted. On the contrary, null hypothesis for the no
significant relationship between fiscal policy and life expectancy are rejected. However, the
entire regression analysis has provided a significant value. Therefore, changes have been
occurred due to some other external macroeconomic factors. The entire analysis can
successfully address all objectives as mentioned before in the paper.
6.2 Recommendations:
After the entire discussion, it can be recommended that fiscal policy does not have any
important significant on education and public health in these EU countries. Therefore, the
government requires imposing more policies to stimulate public expenditure in order to help
economic growth of these countries. Therefore, the research needs to analyse the impact of
fiscal policy on other macroeconomic variables to understand the impact more accurately.

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Appendix
Coun
try
Governmen
t
expenditure
Econom
ic
growth
He
alt
h
Edu
cati
on
Infl
atio
n
Unemp
loymen
t
Economic
growth_prefi
scal
Health_
prefisca
l
Educatio
n_prefisc
al
Austri
a 52.3 0.83
81.
49 99
1.6
1 5.62 1.731485428 72.46 97.00
Belgi
um 55.2 1.29
81.
29 99
0.3
4 8.52 4.444054022 73.21 98.10
Den
mark 55.2 1.62
80.
70 99
0.5
6 6.59
-
0.482992254 74.10 98.50
Franc
e 57 0.95
82.
67 99
0.5
1 10.30 1.58818899 74.05 98.00
Germ
any 44.2 1.62
82.
67 99
0.5
1 4.98 1.408828659 72.68 98.80
Italy 50.9 0.11
83.
09 98.8
0.2
4 12.68 3.43001638 73.94 96.50
Neth
erlan
ds 45.6 1.42
81.
71 99
0.9
8 7.42 1.341914191 75.74 99.00
Spain 44.8 0.89
83.
23
83.2
29
-
0.1
5 24.44 2.208728118 75.35 92.80
Swed
en 51.1 2.60
82.
25 99
-
0.1
8 7.92 1.699971419 75.74 99.00
UK 43 2.60
81.
30 99
1.4
7 6.11
-
2.027768562 73.68 99.00