There are serious econometric problems to address when estimating the impact of poor health on income. Highlights from Strauss and Thomas: • Adult height and adult income are correlated in developing countries (shorter adults have lower income) • There are many difficulties in estimating the causal impact of health status on income. For example, unobserved factors that determine labor productivity may be positively correlated with unobserved factors that improve health (e.g. if your parents were more caring than average about your health, they may also have cared more about your education and sent you to a better school); this will overestimate the impact of health on income. Another example is that the causality could go in the other direction; people with higher incomes spend more on health care. • Little evidence to support nutrition-based efficiency wage models as a cause of unempl. (see pp.811-13) 5
V. Economic Analysis of Health Policies (Filmer, Hammer and Pritchett, 2000, 2002) There are many ways in which the government can get involved in health care, such as: 1. Provide public health services (immunization campaigns, visits by health workers to homes and schools, construct sewage treatment plants, reduce pollution, public education campaigns). 2. Pricing policies (subsidize “essential” drugs and health services, price controls on private providers, prices at government health facilities, reducing distance to health facilities, prices of “bads” that affect health (alcohol, tobacco) 3. Change quality of health care services (mostly applies to government run facilities). A particularly important issue is whether it is possible to increase use of health facilities by raising quality and price at the same time. 4. Regulate private providers (licensing, training & education, regulate potentially dangerous drugs) 6
5. Policies with respect to insurance and employer- provided health benefits (note, the latter only affects those that are employed) 6. Increase education, especially of women (better educated women have healthier children) 7. Research on new methods to treat health problems (research is a public good). In fact, most research is done in developed countries. 8. More generally, policies that promote equitable economic growth Since the 1970s, the UN, the WHO and the World Bank have been advocating that governments in developing countries spend more health money on basic preventative (“primary”) health care services and less money on expensive curative health care services. The basic idea behind this advice was that the impact on health per dollar spent was highest for “primary” health care services. The authors of these 2 papers (all at the World Bank) argue that this may not work, and that a more careful economic analysis is needed of specific health care policies. In particular, they claim that: 7
1. In many countries the “institutional capacity” to implement almost any kind of health care policy is low, so spending money on primary health care does not necessarily mean that provision of primary health care services increases.
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- Spring '14
- Household income in the United States, nutritional status, NJT, Household Health