The Economic Burden of Poor Health in Kenya
By Winnie Nyamboki
The economics literature identifies health as having both direct and indirect effects on the population as well as a country’s output. Economists have argued that a healthier workforce is more productive and this is an illustration of the direct effect. The indirect effect is mostly analysed from a long-term perspective. For example, healthy individuals are less likely to be absent from school thereby diminishing the quality of their education and impacting labour market outcomes over time. The economic burden that is associated with poor health outcomes poses a twofold threat to any economy. Over and above the macroeconomic costs of ill health which are linked to variables like Gross Domestic Product (GDP), mounting evidence shows that microeconomic costs are also significant. Besides the diminished capacity to work, the dilemma of dealing with additional medical and related expenditures can be catastrophic, making households and individuals vulnerable to poverty.
The Government of Kenya, through its ‘Big Four’ agenda , is keen on providing universal health coverage by 2022 to guarantee quality and affordable health care for all. While such an initiative goes a long way in redistributing health resources, Kenya is struggling to cope with the burden of traditional communicable diseases, which continue to account for a sizeable share of health spending. Notably, over the 2012 - 2013 period, the total health expenditures on HIV/AIDS, malaria, TB, diarrhoeal diseases, nutritional deficiencies, vaccine preventable diseases, and diseases of the respiratory system amounted to 106 billion Kenya shillings, which translates to approximately 3% of our GDP. With such huge investments, favourable health outcomes are expected. However, these diseases are among the key drivers of both morbidity and mortality, which describe rates of poor health and death, respectively, among the Kenyan population. According to recent data from the Kenya National Bureau of Statistics, morbidity cases for both communicable and non - communicable diseases have increased from 31.2 million in 2007 to 47 million cases in 2015. Malaria and diseases of the respiratory system continue to be the leading causes of morbidity and together account for 55.3% of all reported morbidity cases in 2015. While the prevalence of these conditions is still rising, it is not clear how this affects labour supply in the Kenyan context.
Previous studies on the relationship between health status and labour market behaviour have generally focused on developed countries. The findings suggest that the relationship between health and labour market outcomes remains ambiguous owing to measurement errors, reverse causality, and omitted variable bias. First and foremost, there is no universal consensus on what really constitutes health. Secondly, there may be other unmeasured factors such as time preferences, risk, and motivation, that simultaneously affect both health and labour supply. These factors all introduce significant complexities when analysing this relationship. Additionally, while self- assessed summary measures of health have been studied widely (i.e. individuals are asked to rate their health on a scale of 1 to 5 where “1 = poor health” to “5 = excellent health”), little attention has been paid to the contribution of specific health conditions on the capacity to work, with a few exceptions in developed countries which concentrate on certain types of chronic illnesses.
It is against this background that my PhD research aims to examine and quantify the contribution of specific types of acute illness on the propensity to participate in the labour market in Kenya. This study focuses on four disease groups: malaria, diseases of the respiratory system, stomach ache complications, as well as injuries resulting from burns, fractures, wounds, and poisoning. These four acute conditions were responsible for 68.9% of Kenya's morbidity burden in 2015. In particular, I will: (1) explore the association between health and participation outcomes across socioeconomic and demographic variables, (2) examine and compare the labour supply outcomes of groups with different acute diseases, and (3) test whether is there a bidirectional relationship between participation in the workforce and specific acute illnesses outcomes among the working age population (“endogeneity”). I anticipate that this research will provide sound economic analysis on the burden of illness and injuries in Kenya, and provide important evidence for investment targeting specific diseases at both the National and County levels.
ABOUT THE AUTHOR
Winnie Adhiambo Nyamboki is an Economist at the National Treasury and is a Ph.D. student at the University of Nairobi’s School of Economics. Her research title is “The Economic Consequences of Poor Health in Kenya”. She is passionate about contributing to the economic aspects of different health outcomes in Kenya.