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Health, Income and Economic Development

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  • Anne Case

    (Princeton University)

Abstract

There is a strong positive relationship between income and health throughout the world. If part of this association represents a causal effect from income to health, then the maintenance and support of incomes becomes a potential policy instrument for promoting population or group health. Policies for income support, such as transfers to the poor, or pensions for the elderly, are instruments that should be assessed, along with the provision of health services, for their ability to improve health. Whether there is a causal link from income to health, and its size, are important research issues for those interested in health in developing countries. This paper uses data from an integrated survey of health and economic well being in South Africa to examine the impact of the South African old age pension on the health of pensioners, and of the prime aged adults and children who live with pensioners. We find evidence of a large and causal effect of income on health status -- one that works at least in part through sanitation and living standards, in part through nutritional status, and in part through the reduction of psychosocial stress. The pension is used to upgrade household facilities, and some of the improvements made have health consequences. We find that the household's water source being on-site and the presence of a flush toilet are both significantly more likely, the greater the number of years of pension receipt in the household. In addition, the presence of a pensioner in the household on average reduces the probability of an adult skipping a meal by 20 percent, and the presence of two pensioners reduces the probability by 40 percent. All adults in the survey were asked a battery of questions of depression, which is inextricably linked to stress and health status. We find that, for households pooling income, the presence of pensioners has a significant effect on reported depression, and that the effect is larger, the greater the number of pensioners. We conclude that governments interested in improving health status may find the provision of cash benefits to be one of the most effective policy tools available to them. Cash provides a yardstick against which other health interventions should be measured.

Suggested Citation

  • Anne Case, 2001. "Health, Income and Economic Development," Working Papers 207, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
    • Handle: RePEc:pri:rpdevs:case_health_income_and_economic_development_wb.pdf
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    References listed on IDEAS

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    Cited by:

    1. Wagstaff, Adam & Pradhan, Menno, 2005. "Health insurance impacts on health and nonmedical consumption in a developing country," Policy Research Working Paper Series 3563, The World Bank.
    2. Olivier Bargain & Prudence Kwenda & Miracle Ntuli, 2017. "Gender bias and the intrahousehold distribution of resources: Evidence from African nuclear households in South Africa," WIDER Working Paper Series 071, World Institute for Development Economic Research (UNU-WIDER).
    3. Marisa Coetzee, 2013. "Finding the Benefits: Estimating the Impact of The South African Child Support Grant," South African Journal of Economics, Economic Society of South Africa, vol. 81(3), pages 427-450, September.
    4. Alícia Adserà & Francesca Dalla Pozza & Sergei Guriev & Lukas Kleine-Rueschkamp & Elena Nikolova, 2021. "Height and well-being during the transition from plan to market," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 36(105), pages 77-120.
    5. Wagstaff, Adam & Yu, Shengchao, 2007. "Do health sector reforms have their intended impacts?: The World Bank's Health VIII project in Gansu province, China," Journal of Health Economics, Elsevier, vol. 26(3), pages 505-535, May.
    6. Frances Lund, 2002. "'Crowding in' care, security and micro-enterprise formation: revisiting the role of the state in poverty reduction and in development," Journal of International Development, John Wiley & Sons, Ltd., vol. 14(6), pages 681-694.
    7. Olivier Bargain & Prudence Kwenda & Miracle Ntuli, 2017. "Gender bias and the intrahousehold distribution of resources: Evidence from African nuclear households in South Africa," WIDER Working Paper Series wp-2017-71, World Institute for Development Economic Research (UNU-WIDER).
    8. Adserà, Alicia & Dalla Pozza, Francesca & Guriev, Sergei & Kleine-Rueschkamp, Lukas & Nikolova, Elena, 2019. "Transition, height and well-being," GLO Discussion Paper Series 404, Global Labor Organization (GLO).
    9. Billy Jack, 2003. "Redistributing to the sick: How should health expenditures be integrated into the tax system?," Working Papers gueconwpa~03-03-16, Georgetown University, Department of Economics.
    10. Coffey, Diane & Spears, Dean & Vyas, Sangita, 2017. "Switching to sanitation: Understanding latrine adoption in a representative panel of rural Indian households," Social Science & Medicine, Elsevier, vol. 188(C), pages 41-50.
    11. Hohmann, Sophie & Garenne, Michel, 2010. "Health and wealth in Uzbekistan and sub-Saharan Africa in comparative perspective," Economics & Human Biology, Elsevier, vol. 8(3), pages 346-360, December.
    12. Kanbur, Ravi, 2004. "Growth, Inequality And Poverty: Some Hard Questions," Working Papers 127133, Cornell University, Department of Applied Economics and Management.
    13. Martin Wittenberg, 2009. "Lazy Rotten Sons? Relatedness, gender and the intra-household allocation of work and leisure in South Africa," SALDRU Working Papers 28, Southern Africa Labour and Development Research Unit, University of Cape Town.
    14. Teresa García-Muñoz & Shoshana Neuman & Tzahi Neuman, 2014. "Subjective Health Status of the Older Population: Is It Related to Country-Specific Economic Development Measures?," Working Papers 2014-02, Bar-Ilan University, Department of Economics.
    15. Adsera, Alicia & Dalla Pozza, Francesca & Guriev, Sergei & Kleine-Rueschkamp, Lukas & Nikolova, Elena, 2019. "Transition from Plan to Market, Height and Well-Being," IZA Discussion Papers 12658, Institute of Labor Economics (IZA).
    16. Safaa E. El-Kogali & El Daw A. Suliman, 2001. "Poverty, Human Capital and Gender: A Comparative Study OF Yemen and Egypt," Working Papers 0123, Economic Research Forum, revised 08 Sep 2001.
    17. Marie-Claude Martin, 2008. "Individual and Collective Resources and Health in Morocco," WIDER Working Paper Series RP2008-21, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    South Africa;

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development

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