How do investments in health contribute to economic development

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How do investments in health contribute to
economic development?

• A Synthesis of Recent Research
• By Margaret Saunders
• October 14, 2005

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Purpose of Work

• Purpose Improve understanding of the critical
  role of health to international development,
  economic growth, and USG goals
• Target Audience Policy makers (ANE region)
• Goal to increase investment in the health sector
• Products Literature Review, Advocacy Pieces
• Presentation Findings on Economic costs of poor
  health Health contributions to economic growth
  Synergies of health and education

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Relationship of investment in health and economic
development
Health Status
Economic Growth
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WHO Commission on Macroeconomics and Health

• Conclusion Disease and disability have a
  negative effect on economic growth
• Disease impedes economic development
• Directly, through early death, chronic disability
  to workers
• Through limited investment in children
• Through dampening effects on industries.
• December, 2001

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High Burden of Infectious Disease in developing
countries

• The burden and impact is much greater for
  developing countries
• ID causes early deaths in children, young adults,
  and illness and disability
• Deaths from ID contribute most to disparities in
  life spans between developing - developed
  countries

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IDs inhibit economic productivity

• WHO (2001, 1999)
• Impact of morbidity, disability a major cause of
  under development
• Economic cost of lost working days
• Economic cost of treatment
• Impact on household poverty.

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Economic Costs of Poor Health Malaria

• Malaria has a large impact on economic growth
  (direct, indirect)
• Countries that eliminated malaria have
  substantially higher economic development than
  neighboring countries for 5 years afterwards
• (Gallup Sachs, 2000)

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Economic Burden of ID
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Cost Savings from Eliminating Disease

• The costs of treatment may be far less than the
  economic costs of poor health due to disease.
• Smallpox eradication is estimated to have cost
  300 million cost savings include savings from
  on-going vaccination costs, and health care costs
  and premature death from disease.
• Polio eliminated from the Americas, in parts of
  India and Africa worldwide savings on
  vaccination costs estimated at 1.5 billion (WHO,
  1999).

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New Research (2000-2004)

• How does health contribute to greater income?
• Directly higher productivity of workers
• Indirectly increased learning, education
• Indirectly through spillover effects of greater
  savings and investment
• Demographic gift during transition

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Greater Labor Productivity

• Improved health and nutrition
• Increases labor productivity (more productive,
  less absenteeism, higher incomes than those with
  poor health)
• Fosters greater economic participation of women
• Increases life expectancy

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New Lessons from Europe

• Historical analysis of 10 industrialized
  countries over 100-125 years
• Health improvements enhanced human capacity,
  increased the pace of economic development by
  30-40
• Conclusion Investments in public health,
  nutrition, controlling disease has growth
  enhancing effect for economies
• (Arora, 2001)

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New Lessons from Europe

• Improved labor productivity was one of the
  principal sources of long-term economic growth in
  Britain
• The combined impact of improved diets,
  reductions in infectious disease, better living
  standards, environmental health
• Resulted in increased labor force participation
  by poor, and increased output
• (Fogel, 2002)

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New Lessons from East Asia

• Health improvements identified as a major pillar
  of economic miracle, accounting for 1/3 of
  economic growth.
• Public health improvements resulted in decline of
  infant and child mortality
• Family planning brought fertility reduction
• Benefited from demographic gift
• (Bloom and Canning, 2000)

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Synergies of Health and Nutrition on Education

• There are synergies between improvements in
  health and education
• Investments in health contribute to improved
  learning
• Poor children are more likely to enroll in school
  late, suffer frequent absence, due to illness,
  resulting in low educational attainment

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Research on Impact of Nutrition on Education

• Micro-nutrient deficiencies affect child health,
  development, survival (De Benoist, 2001)
• Anemic children have poorer cognition, school
  achievement than non-anemic children
  (Grantham-McGregor Ani, 2001)
• Joint treatment of iron, parasites shown to
  positively impact physical, mental development in
  preschool children (Stoltzfus et al, 2001)
• Chronic under nutrition leads to adverse
  cognitive development and school performance
  (Pollitt et al, 1996)

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Message for PolicymakersInvest in health

• Disease and disability have a negative effect on
  economies
• Contributions of health and nutrition to economic
  development have been underestimated
• Health stimulates economic growth.