Working Paper: CEPR ID: DP17393
Authors: David Bloom; David Canning; Rainer Kotschy; Klaus Prettner; Johannes Schuenemann
Abstract: Economists use micro-based and macro-based approaches to assess the macroeconomic return to population health. The macro-based approach tends to yield estimates that are either negative and close to zero or positive and an order of magnitude larger than the range of estimates derived from the micro-based approach. This presents a micro-macro puzzle regarding the macroeconomic return to health. We reconcile the two approaches by controlling for the indirect effects of health, which macro-based approaches usually include but micro-based approaches deliberately omit when isolating the direct effect of health. Our results show that the macroeconomic return to health lies in the range of plausible microeconomic estimates, demonstrating that both approaches are in fact consistent with one another.
Keywords: productivity; population health; human capital; economic development
JEL Codes: I15; I25; J11; O11; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| 10 percentage point increase in adult survival rates (I14) | 106% increase in labor productivity (O49) |
| health improvements (I14) | enhanced economic productivity (O49) |
| health (I19) | economic growth (O49) |
| past economic development, institutions, and demographic structures (O17) | health (I19) |