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Citation Information

Type Journal Article - Living standards measurement study (LSMS) working paper
Title Measurement of returns to adult health: morbidity effects on wage rates in Cote d'Ivoire and Ghana
Volume 1
Issue LSM95
Publication (Day/Month/Year) 1993
URL http://www-wds.worldbank.org/external/default/main?pagePK=64193027&piPK=64187937&theSitePK=523679&me​nuPK=64187510&searchMenuPK=64187283&theSitePK=523679&entityID=000009265_3970311121946&searchMenuPK=6​4187283&theSitePK=523679
Sickness should make individuals less productive by reducing their capacity to do work. Measurement of this effect of morbidity on productivity involves several measurement problems. First, there is no consensus on how to measure adult morbidity in a household survey of a low-income population. Second, if part of earnings is used to improve health, how is the impact of morbidity on productivity inferred? To consider the first problem, surveys from Cote d'Ivoire and Ghana are examined to assess whether self-reported functional activity limitation due to illness is a reasonable indicator of morbidity for wage earners. In both countries this form of morbidity is about one day in the last four weeks and varies in a plausible manner. To deal with both the measurement and joint determination problems, an instrumental variable estimation approach using local food prices and public services is implemented for assessing how morbidity impacts on wages and earnings. These estimates indicate that morbidity is linked among men to declines in hourly wage rates, and associated with reduced hours of work for wages, and a reduced probability of entering the wage labor force. Among much smaller samples of wage earning women, the patterns between morbidity and wage rates and time allocation are not uniform or statistically significant.

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