The impact of poor health on factor productivity: an empirical investigation

Abstract

A number of recent studies have illustrated the link between health and economic growth. This paper argues that a key mechanism through which health affects growth is via total factor productivity (TFP). We first estimate TFP based on a production function and then estimate the determinants of TFP, paying particular attention to three indicators of health that are particularly problematic in developing regions: malnutrition, malaria and water borne diseases. We find the impact of poor health on TFP to be negative, significant, and robust across a wide variety of specifications