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Labor Supply, Schooling and the Returns to Healthcare in Tanzania

  • Achyuta Adhvaryu

    ()

    (MEPH Health Policy and Administration, Yale University)

  • Anant Nyshadham

    ()

    (Department of Economics, Yale University)

Registered author(s):

    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.

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    File URL: http://www.econ.yale.edu/growth_pdf/cdp995.pdf
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    Paper provided by Economic Growth Center, Yale University in its series Working Papers with number 995.

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    Length: 34 pages
    Date of creation: Mar 2011
    Date of revision:
    Handle: RePEc:egc:wpaper:995
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    1. Dora L. Costa, 1994. "Health and Labor Force Participation of Older Men, 1900-1991," NBER Working Papers 4929, National Bureau of Economic Research, Inc.
    2. Beegle, Kathleen & Dehejia, Rajeev & Gatti, Roberta, 2005. "Why should we care about child labor? The education, labor market, and health consequences of child labor," Policy Research Working Paper Series 3479, The World Bank.
    3. Foster, Andrew D & Rosenzweig, Mark R, 1994. "A Test for Moral Hazard in the Labor Market: Contractual Arrangements, Effort, and Health," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 213-27, May.
    4. Harsha Thirumurthy & Markus Goldstein & Joshua Graff Zivin, 2005. "The Economic Impact of AIDS Treatment: Labor Supply in Western Kenya," Working Papers id:300, eSocialSciences.
    5. Glewwe, Paul & Jacoby, Hanan G, 1995. "An Economic Analysis of Delayed Primary School Enrollment in a Low Income Country: The Role of Early Childhood Nutrition," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 156-69, February.
    6. Beegle, Kathleen & Dehejia, Rajeev H. & Gatti, Roberta, 2006. "Child labor and agricultural shocks," Journal of Development Economics, Elsevier, vol. 81(1), pages 80-96, October.
    7. Kruger, Diana I., 2007. "Coffee production effects on child labor and schooling in rural Brazil," Journal of Development Economics, Elsevier, vol. 82(2), pages 448-463, March.
    8. Adhvaryu, Achyuta & Nyshadham, Anant, 2011. "Healthcare Choices, Information and Health Outcomes," Working Papers 88, Yale University, Department of Economics.
    9. Harold Alderman & Jere R. Behrman & Victor Lavy & Rekha Menon, 2001. "Child Health and School Enrollment: A Longitudinal Analysis," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 185-205.
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