When Does Improving Health Raise GDP?

46 Pages Posted: 25 Jun 2012

See all articles by Quamrul H. Ashraf

Quamrul H. Ashraf

Williams College - Department of Economics

Joseph Beaulieu

affiliation not provided to SSRN

David N. Weil

Brown University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: October 2008

Abstract

We assess quantitatively the effect of exogenous health improvements on output per capita. Our simulation model allows for a direct effect of health on worker productivity, as well as indirect effects that run through schooling, the size and age-structure of the population, capital accumulation, and crowding of fixed natural resources. The model is parameterized using a combination of microeconomic estimates, data on demographics, disease burdens, and natural resource income in developing countries, and standard components of quantitative macroeconomic theory. We consider both changes in general health, proxied by improvements in life expectancy, and changes in the prevalence of two particular diseases: malaria and tuberculosis. We find that the effects of health improvements on income per capita are substantially lower than those that are often quoted by policy-makers, and may not emerge at all for three decades or more after the initial improvement in health. The results suggest that proponents of efforts to improve health in developing countries should rely on humanitarian rather than economic arguments.

Suggested Citation

Ashraf, Quamrul H. and Beaulieu, Joseph and Weil, David Nathan, When Does Improving Health Raise GDP? (October 2008). NBER Working Paper No. w14449. Available at SSRN: https://ssrn.com/abstract=2090655

Quamrul H. Ashraf (Contact Author)

Williams College - Department of Economics ( email )

24 Hopkins Hall Drive
Williamstown, MA 01267
United States
(413) 597-2476 (Phone)
(413) 597-4045 (Fax)

HOME PAGE: http://econ.williams.edu/profile/qha1/

Joseph Beaulieu

affiliation not provided to SSRN

No Address Available

David Nathan Weil

Brown University - Department of Economics ( email )

Box B
Providence, RI 02912
United States
401-863-1754 (Phone)
401-863-1970 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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