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