Worms at work: long-run impacts of child health gains

Synopsis

We exploit experimental variation in a Kenyan deworming program to study the impacts of child health investments on adult living standards. We calibrate the Grossman (1972) model, in which health investments increase future endowments of healthy time, and estimate the labor market and fiscal impacts of such investments. We find differential impacts by gender. Ten years after the start of the program, Kenyan men who participated in the program as boys work 3.4 more hours each week, spend more time in entrepreneurship, are more likely to hold manufacturing jobs with higher wage earnings, and have higher living standards. Kenyan women who participated as girls have better self-reported health and education outcomes, and they are more likely to grow cash crops and reallocate labor time from agriculture to entrepreneurship. The deworming program also generates positive externalities from reduced disease transmission. Our findings have important and novel impacts for the debate over public health subsidies in low-income countries. A calibration suggests fully subsidizing deworming costs at less than the additional net present value of government revenue it generates, creating an “expenditure Laffer effect” in which government subsidies for health investments allow for reduced tax rates.

 

Bio

Edward (Ted) Miguel is the Oxfam Professor in Environmental and Resource Economics and Faculty Director of the Center for Effective Global Action at the University of California, Berkeley. He earned SB degrees in both Economics and Mathematics from the Massachusetts Institute of Technology, and received a PhD in Economics from Harvard University, where he was a National Science Foundation Fellow.
 
Dr. Miguel's main research focus is African economic development, including work on the economic causes and consequences of violence; the impact of ethnic divisions on local collective action; and interactions between health, education, environment, and productivity for the poor. He has conducted field work in Kenya, Sierra Leone, Tanzania, and India. He is a Faculty Research Associate of the National Bureau of Economic Research, Associate Editor of the Quarterly Journal of Economics, Journal of Development Economics, and Review of Economics and Statistics, recipient of the 2005 Alfred P. Sloan Fellowship, and winner of the 2005 Kenneth J. Arrow Prize awarded annually by the International Health Economics Association for the Best Paper in Health Economics. He is a recipient of the 2012 University of California, Berkeley, campus-wide Distinguished Teaching Award.
 
Dr. Miguel is author, with Ray Fisman, of Economic Gangsters: Corruption, Violence and the Poverty of Nations (Princeton University Press, 2008), and author of Africa's Turn? (MIT Press, 2009).
Date:
February 6, 2013
Time:
4:00 p.m. coffee reception; 4:15 p.m. lecture
Location:
IHME
Event Type:
IHME seminar
Speakers

Edward Miguel

Edward Miguel
Oxfam Professor in Environmental and Resource Economics, Faculty Director of the Center for Effective Global Action, University of California, Berkeley
Institute for Health Metrics and Evaluation
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