Health Expenditure and Labor Productivity in Enugu State: Evidence from the Public Sector (2018 to 2024)

Health expenditure is a fundamental component of human capital investment, with direct implications for worker productivity, absenteeism rates, and the long-run productive capacity of a workforce. This study examines the relationship between health expenditure and labor productivity in Enugu State's public sector from 2018 to 2024. The study is anchored on the Human Capital Theory of Health, which posits that health is a productive input that determines the volume and quality of labor an individual can supply over time. A longitudinal research design was adopted using secondary data from the Enugu State Ministry of Health, the Office of the Accountant General, and the National Bureau of Statistics, supplemented by primary data from 250 public sector workers drawn from five ministries using purposive sampling. Multiple regression analysis was applied to estimate the effect of health spending on productivity measures including sick leave days, work output ratings, and absenteeism frequency. Findings indicate that increases in government health expenditure per worker were associated with a statistically significant reduction in absenteeism and an improvement in self-rated work output among public sector employees. However, the quality of healthcare facilities and timeliness of service delivery moderated the magnitude of productivity gains. The study concludes that health expenditure is a meaningful determinant of public sector labor productivity in Enugu State. It is recommended that the state government increase the health sector's budgetary allocation to at least 15 percent of total expenditure in line with the Abuja Declaration commitment.

Keywords: Health expenditure, labor productivity, human capital, Enugu State, absenteeism