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Labor Supply, Schooling and the Returns to Healthcare in Tanzania

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  • Achyuta Adhvaryu

    (MEPH Health Policy and Administration, Yale University)

  • Anant Nyshadham

    (Department of Economics, Yale University)

Abstract

We estimate the effects of higher quality healthcare usage on health, labor supply and schooling outcomes for sick individuals in Tanzania. Using exogenous variation in the cost of formal sector healthcare to predict treatment choice, we show that using better quality care improves health outcomes and changes the allocation of time amongst productive activities. In particular, sick adults who receive better quality care reallocate time from non-farm to farm labor, leaving total labor hours unchanged. Among sick children, school attendance significantly increases as a result of receiving higher quality healthcare, but labor allocations are unaffected. We interpret these results as evidence that healthcare has heterogeneous effects on marginal productivity across productive activities and household members.

Suggested Citation

  • Achyuta Adhvaryu & Anant Nyshadham, 2011. "Labor Supply, Schooling and the Returns to Healthcare in Tanzania," Working Papers 995, Economic Growth Center, Yale University.
  • Handle: RePEc:egc:wpaper:995
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    References listed on IDEAS

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    Cited by:

    1. Adhvaryu, Achyuta & Nyshadham, Anant, 2011. "Healthcare Choices, Information and Health Outcomes," Center Discussion Papers 107257, Yale University, Economic Growth Center.
    2. Achyuta Adhvaryu & Anant Nyshadham, 2011. "Labor Complementarities and Health in the Agricultural Household," Working Papers 996, Economic Growth Center, Yale University.

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    More about this item

    Keywords

    labor supply; health shocks; schooling; Tanzania;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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