Healthier diets: a global economic modelling study of income and employment impacts across regions

Interest has grown in how to achieve healthy, sustainable, and affordable human diets. The potential income and employment effects of a transition towards healthier diets have received much less attention. We simulate aggregate and sectoral income and employment for business-as-usual and healthier diets for all geographic regions up to 2050 using scenario-based modelling. These healthier diets can increase food’s share of household expenditure in some regions, for example from 18% to 25% in East and Central Africa in 2050. Our results suggest that a global shift towards healthier diets leads to a reallocation of primary factors of production, especially low-skilled labour and capital, from non-agricultural sectors to crop agriculture in parts of sub-Saharan Africa and South Asia. Notably, in 2050, with healthier diets, agriculture’s share of low-skilled labour increases by 3.2 percentage points in East and Central Africa and 1.5 percentage points in South Asia excluding India. Although Gross Domestic Product increases in these regions relative to business-as-usual, this reallocation raises agriculture’s share of Gross Domestic Product, consistent with a slower pace of long-run structural transformation. The reallocation leads to a mild increase in wages for low-skilled workers relative to high-skilled workers in most of these regions, compared to business-as-usual. However, in parts of sub-Saharan Africa, food price increases outweigh wage gains for low-skilled labour, reducing real purchasing power. Policies that encourage healthier diets may also alter income and employment and reduce economic welfare of poor populations in some regions, so care is needed in policy design to avoid adverse unintended consequences.