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Can improved health conditions contribute to long-term economic growth?

Patricio V. Marquez's picture

In the face of budgetary limitations, constrained international aid, and competitive demands from different sectors, how can those of us working in the health sector make a strong case to finance ministers that public investments in health are  as productive as public investments in, say, infrastructure or agriculture? 

The public health narrative does a good job of explaining the distribution of diseases in populations and the environmental, social and personal factors that influence the occurrence of disease, while providing a good basis to guide the formulation of health policies and resource allocation within the health system.  But, as we have found in different countries, it is not sufficient to convince our counterparts at the ministries of finance about the need to invest on improving health conditions as a development priority.

So what arguments can we put on the table to make the case that investments in health matter for the overall economic and social development of developing countries? A recent article by Jakob Madsen convincingly explains how improved health and nutrition conditions in a population can drive economic growth.  To reach this conclusion, Madsen constructed a measure of health-adjusted educational attainment among the working-age population (based on their health status during the time they did their education) and assessed data for 21 OECD countries from 1812-2009. 

As Madsen’s paper shows, the pathway through which health influences economic growth can be better understood when considering the direct contribution of malnutrition and sickness among children on decreased enrollment and increased absenteeism from school. Illness also contributes to reduced concentration in the classroom, cognitive impairment, stigma, and impaired coping skills. 

Similarly, ideas production as measured by the growth in patents, entrepreneurship and lateral thinking to solve problems through creative approaches, are impaired by chronic health conditions. So, ill health, premature mortality and disability negatively influence cognitive development, learning, the amount of schooling and idea production—that is, they undermine knowledge generation and human capital production, which are the core drivers of technological progress for long-term economic growth. 

Some people may conclude that these findings mainly restate a well-known argument (consistent with common sense) that ill-health affects education outcomes that, in turn, affect economic growth. But the two centuries of OECD country data assessed by Madsen reinforces the need for governments in developing countries to prioritize policy measures and multisectoral interventions that contribute to improve health conditions and support early child nutrition and development as key investments for improving the quality and quantity of human capital production—the path through which health influences economic growth. Indeed, while good health is an important goal in and of itself, the paper by Madsen provides strong evidence that health is not only highly influential for learning but subsequently for enhanced productivity of workers when they enter the labor force. 

In assessing possible factors that may influence developing countries to embark or continue on a sustained growth path, or even accelerate it in the future, governments will do well in heeding the lessons from history. In an increasingly competitive world, improved health and nutrition of the population, coupled by relevant knowledge and skills imparted by quality education are essential building blocks for strong, inclusive and prosperous countries.

After all, as the 1993 Nobel laureate Robert Fogel compellingly documented in his book, The Escape from Hunger and Premature Death, 1700-2100,the synergy between improved productive technology and healthier people has contributed to the acceleration of economic growth, reduced inequality, and improved quality of life.

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