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How Much of Cross-Country Income Variation is Explained by Health?

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Abstract

We use development accounting techniques to assess the contribution of health to differences in income per capita among countries. Rather than rely on regressions in aggregate data, we build up estimates of the effect of health starting from microeconomic data. We examine both a particular condition, anemia, and a proxy for general health, the adult survival rate. We find that differences in anemia explain 1.3 percent of the log variance of income per capita, and that differences in adult survival explain 19 percent of the log variance of income per capita. The latter figure is almost one third of the variation in output that is left unexplained by other measures of factor accumulation. (JEL: O47, I10) Copyright (c) 2003 The European Economic Association.
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  • Gauri Kartini Shastry & David N. Weil, 2003. "How Much of Cross-Country Income Variation is Explained by Health?," Working Papers 2003-08, Brown University, Department of Economics.
    • Handle: RePEc:bro:econwp:2003-08
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    1. repec:idb:brikps:42218 is not listed on IDEAS
    2. David N. Weil, 2005. "Accounting for the Effect of Health on Economic Growth," NBER Working Papers 11455, National Bureau of Economic Research, Inc.
    3. Felicia Marie Knaul & Edmundo Murrugarra & Carlos Hernández Alvarez & Rafael Cortez & William D. Savedoff & Jaime Espinosa Ferrando & Rocío Ribero Medina & Martín Valdivia & T. Paul Schultz & Jairo Nú, 2000. "Wealth from Health: Linking Social Investments to Earnings in Latin America," IDB Publications (Books), Inter-American Development Bank, number 42218 edited by William D. Savedoff & T. Paul Schultz, February.
    4. Knaul, Felicia Marie & Murrugarra, Edmundo & Hernández Alvarez, Carlos & Cortez, Rafael & Savedoff, William D. & Espinosa Ferrando, Jaime & Ribero Medina, Rocío & Valdivia, Martín & Schultz, T. Paul &, 2000. "Wealth from Health: Linking Social Investments to Earnings in Latin America," IDB Publications (Books), Inter-American Development Bank, number 321, June.
    5. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    6. Levin, Henry M, 1986. "A Benefit-Cost Analysis of Nutritional Programs for Anemia Reduction," The World Bank Research Observer, World Bank, vol. 1(2), pages 219-245, July.
    7. Peter J. Klenow & Andrés Rodríguez-Clare, 1997. "The Neoclassical Revival in Growth Economics: Has It Gone Too Far?," NBER Chapters, in: NBER Macroeconomics Annual 1997, Volume 12, pages 73-114, National Bureau of Economic Research, Inc.
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    More about this item

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • I10 - Health, Education, and Welfare - - Health - - - General

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