Health and Labour Force Participation: Empirical Evidence from Nigeria
Keywords:
Ill-health, life expectancy, labour force participation
Abstract
This study examines the impact of life expectancy and ill-health on labour force participation in Nigeria using data from World Development Indicators. Two models of labour supply decision using two-stage instrumental variable estimation method with main predictors of health on labour market performance: life expectancy, incidence of malaria, tuberculosis, HIV/AIDS were employed to examine the effects of health on labour force market participation. The results show that increase in life expectancy will increase labour force participation by about 33% without controlling for other household characteristics and by about 83% when control for other household characteristics. Also, reduction in diseases like Malaria, HIV/AIDS and Tuberculosis will increase labour supply and productivity. Thus, it was concluded that ill-health has negative impact on industrialization through reduced economic output due to decline labour supply. It was therefore suggested that public sector must play an important role in key areas like labour market, education and rural-urban migration to improve the health of the labour force and hence overall productivity. Higher priority should also be given to tackling widespread diseases with low mortality burdens, but considerable effects on productivity.
References
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Suhrcke, M., McKee M., Sauto-Arce R. and Mortensen J. (2005). The Contribution of Health to the Economy of the European Union. European Commission: Brussels.
Thomas, D. (2009). The causal effect of health on social and economic prosperity: Methods and findings. A paper prepared for the AERC Health, Economic Growth and Poverty Reduction in Africa Framework Workshop, Accra.
Tompa, E. (2002). The impact of health on productivity: Empirical evidence and policy implications. Review of Economic Performance and Social Progress.
World Health Organization (1999). Definition, Diagnosis and Classification of Diabetes Mellitus and its Complications (Part 1). Department of Non-Communicable Disease Surveillance, World Health Organization; Geneva.
Aromolaran, A. (2004). Female schooling, non-market productivity, and labour market participation in Nigeria. Economic Growth Centre, Discussion Paper 879. Yale University, USA.
Audibert, M. (2009). Issues and challenges of measurement of health: Implications for economic research. Prepared for the African Economic Research Consortium on Health, Economic Growth and Poverty Reduction in Africa. Framework paper for workshop. Accra, Ghana.
Becker, G.S. (1964). Human Capital. New York, Columbia University Press.
Becker, G. (1965). A theory of allocation and time. Economic Journal, 75 (299): 493– 517.
Bloom, D.E., Canning D. and Sevilla J. (2004). The effect of health on economic growth: A production function approach. World Development, 32: 1–13.
Bloom, D.E. and Canning D. (2000). The health and wealth of nations. Science Compass, 287:1207-1209.
Bridges, S. and Lawson, D. (2008). Health and labour market participation in Uganda. Discussion Paper No.2008/07. World Institute for Development Economic Research.
Cai, L.X. and Kalb G. (2006). Health status and labour force participation: Evidence from Australia. Health Economics, 15(3): 241-261.
Cai, L. and Kalb, G. (2004). Health status and labour force participation: Evidence from the HILDA data. Melbourne Institute Working Paper No.4/04. University of Melbourne.
Currie, J. and Madrian, B. (1999). Health, health insurance and the labour market. In: O. Ashenfelter and D. Card (eds) Handbook of Labour Economics (Vol. 3). Amsterdam: Elsevier. 3309–416.
Chirikos, T.N. (1993). The relationship between health and labour market status. Annual review of Public Health, 14: 293-312.
Cole, M.A. and Neumayer, E. (2005). The impact of poor health on factor productivity. Journal of Development Studies, 42 (6): 918-938.
Deschryvere, M. (2005). Health and Retirement Decisions an Update of the Literature. ENEPRI Research Report No. 6.
Deschryvere, M. (2005). Health and retirement decisions: An update of the literature. European Network of Economic Policy Research Institutes (ENEPRI). Research Report No.6.
Disney, R., Emmerson, C. et al. (2006). Ill health and retirement in Britain: A panel data-based analysis. Journal of Health Economics 25(4): 621-649.
Doğrul, H.G. (2015). The effects of health on labour force participation: Evidence from Turkey. International Journal of Economics and Finance, 7(8).
Fogel, R.W. (1991). The conquest of high mortality and hunger in Europe and America: Timing and mechanisms. In: D. Lander, C. Higgonet and H. Rosovsky (eds) Favourite of Fortunes: Technology, Growth and Economic Development since the Industrial Revolution. Cambridge MA: Harvard University Press.
Fogel, R.W. (1994). Economic growth, population theory and physiology: The bearing of longterm processes on the making of economic policy. Working Paper No. 4638. Washington DC: National Bureau of Economic Research.
Grossman, M. (2000). The human capital model. In: A.J. Culyer and J.P. Newhouse (eds) Handbook of Health Economics. Amsterdam: Elsevier.
Grossman, M. (1999). The human capital model of the demand for health. National Bureau of Economic Research Working Paper No.7078.
Grossman, M. (1972). On the concept of health capital and the demand for health. Journal of Political Economy, 80: 223–55.
Harris, A. (2008). Chronic Disease and Labour Force Participation in Australia: An Endogenous Multivariate Probit Analysis of Clinical Prevalence. USA; Data Centre for Health Economics.
Hempel, J. and Najera, J. (1996). The Burden of Malaria. Geneva: World Health Organization.
H'madoun, M. (2010). Religion and labour force participation of women. Unpublished thesis, Faculty of Applied Economics, University of Antwerp.
Holt, H. (2010b). The cost of ill health. New Zealand Treasury Working Paper 10/04.
Holt, H. (2010a). Health and labour force participation. New Zealand Treasury Working Paper No10/03, New Zealand.
Lancaster, K.J. (1966). A new approach to consumer theory. Journal of Political Economy, 74: 32-157.
Lawanson, O.I. (2008). Female labour force participation in Nigeria: Determinants and trends. Presented at the Oxford Business and Economic Conference Programme, Oxford, United Kingdom. June 22-24.
Lucas, R.E. Jr. (1988). On the mechanics of economic development. Journal of Monetary Economics, 22:3-42.
Magidu, N. (2010). Socioeconomic investigation into determinants of labour force participation in labour markets: Evidence from Uganda. Mimeo. Economic Policy Research Centre, Makerere University, Uganda.
Matovu F., Birungi P. and Sebaggala R. (2012). Ill-health and labour market outcomes in Uganda: Evidence from 2005/06 national household survey. Paper presented at the 2012 CSAE Conference on Economic Development in Africa, Oxford University, 18th -20th March.
Ogwumike, F.O., Alaba A.A., Alaba O.B., Alayande B.A. and Okogie C.E.E. (2006). Labour force participation, earnings and inequality in Nigeria. A report.
Romer, P.M. (1986). Increasing returns and long-run growth. Journal of Political Economy, 94(5): 1002-1037.
Sackey, H.A. (2005). Female labour force participation in Ghana: The effects of education. AERC Research Paper 150, Nairobi.
Standing, G. and Sheehan G. (eds) (1978). Labour Force Participation in Low-Income Countries. ILO Office; Geneva.
Strauss, J. and Thomas D. (1998). Health, nutrition and economic development. Journal of Economic Literature, 36: 766–817.
Suhrcke, M., Sauto-Aarce R., McKee M. and Rocco L. (2008). Economic Costs of Ill-health in the European Region. World Health Organization; Geneva.
Suhrcke, M., McKee M., Sauto-Arce R. and Mortensen J. (2005). The Contribution of Health to the Economy of the European Union. European Commission: Brussels.
Thomas, D. (2009). The causal effect of health on social and economic prosperity: Methods and findings. A paper prepared for the AERC Health, Economic Growth and Poverty Reduction in Africa Framework Workshop, Accra.
Tompa, E. (2002). The impact of health on productivity: Empirical evidence and policy implications. Review of Economic Performance and Social Progress.
World Health Organization (1999). Definition, Diagnosis and Classification of Diabetes Mellitus and its Complications (Part 1). Department of Non-Communicable Disease Surveillance, World Health Organization; Geneva.
Published
2018-03-01
Section
Articles
