Can health differences fully explain the large disparities in productivity and income per capita across countries?
What will be an ideal response?
Health is a form of human capital that affects learning capacity and worker productivity. However, the presence of diseases like malaria and hookworm infection in underdeveloped and developing countries is unlikely to explain the very large differences in per capita income and productivity that we observe today for several reasons:
• The impact of poor health on productivity, obtained in microeconomics studies, is too small to account for the enormous differences in income per capita we observe between rich and poor countries today.
• Causation can move in either direction; poor health conditions in parts of the world today are as much a consequence of poverty as a cause. Low life expectancy, infectious diseases, and poor health conditions in eighteenth-century England did not prevent English cities from becoming engines of economic growth.
• Studies that look at the macroeconomic effects of large health improvements do not find evidence for supporting the premise that even very successful health interventions will create much faster economic growth (even though they will save millions of lives and are thus extremely valuablesocially).
A-head: ECONOMICS OF HEALTH
Concept: Health and productivity
You might also like to view...
What does U.S. GDP intend to measure?
A) The market value of final goods and services produced by U.S. citizens during the course of a year B) The market value of all goods and services produced by U.S. citizens during the course of a year C) The market value of final goods and services produced within the U.S. during the course of a year D) The market value of all goods and services produced within the U.S. during the course of a year
If the United States sells computers to Russia, and uses the proceeds to buy shares of stock in Russian companies, the U.S. trade balance ________ and the U.S. financial account balance ________
A) rises; rises B) rises; falls C) falls; falls D) falls; rises