This study sought to understand the relationship between child health outcomes and health spending while investigating lagged effects. The study employed panel data from 45 Sub-Saharan African countries between 1995 and 2011 obtained from the World Bank’s World Development Indicators. Fixed and Random effect models were estimated. Under-five, infant and neonatal mortality were used as child health outcomes while total health spending was disaggregated into public and private spending. The effects of one and two period lags of expenditure were estimated. The results show a positive and significant relationship between health expenditure and child health outcomes with elasticities of -0.11 for infant mortality, -0.15 (under-five mortality) and -0.08 (neonatal mortality). Public health expenditure was found to be relatively more significant than private expenditure. Positive and significant lagged effects were also estimated between health expenditure and child health. The findings suggest that, while health expenditure is crucial for the improvement of child health, it is equally important for this expenditure to be sustainable as it also has delayed effects.

Keywords : Health expenditure; Child health outcomes; Lag effects; SSA.