The role of education in health system performance

I investigate the role of education on health, using country-level data and the production frontier framework suggested by the World Health Organization (WHO) to assess performances of health care systems. I find that the impact of human capital on health is much smaller than suggested by the WHO frontier model, and the relationship exhibits diminishing return in the observed range of education. Taking into account the heterogeneity in this relationship generates a different ranking of the efficiency of health care systems internationally. This suggests that the method currently used by the WHO favors health care systems operating in countries that underinvested in education in the past. (C) 2007 Elsevier Ltd. All rights reserved.