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Forward Linkages of Health to Economic Productivity

Health outcomes impact productivity through a variety of pathways (see the figure below).  Overall the function for multifactor productivity from human capital (MFPHC) is a sum of terms linked to educational expenditures (GDS(EDUC)) as a portion of GDP and to educational attainment of adults in society (EDYRSAG15) with two more directly health-related terms of interest to us here, respectively from adult stunting (STUNTCONTRIB) and disability of those in their working years (HLYLDWORK).  

In the IFs health module, the prevalence of adult stunting (HLSTUNT) relates negatively to overall productivity via an elasticity ( mfpstunt ).  In extreme cases, stunting could cost as much as 1 percent of economic growth. 

We compute HLSTUNT in the health model itself.  We initialize adult stunting in a long-term lagged relationship (using a moving average of 25 years) with child malnutrition (MALNCPH) and forecast it as a function of both malnutrition and child mortality as a proxy for morbidity.

health to economic productivity flowchart

Turning to disability (which is driven by mortality rates), childhood malnutrition and morbidity do not give rise to all of disability in working years; much also comes from disabilities arising during the working years. IFs therefore also calculates millions of years of living with disability related to mortality rates specific to the working aged-population (HLYLDWORK).  

Turning to the forecasting relationship between disability and productivity, the IFs approach drives changes in the growth of productivity from the changing difference between computed and expected values of disability.  We used the world average disability rate as an “expected” value.  Because we have replicated the practice of the GBD project and kept mental health disability rates constant over time, and because mental health generally dominates disability, forecasts of this disability term are relatively stable over time. Thus analysis with respect to this variable will depend on scenarios that increase or decrease those disability rates.   Changes in disability levels (relative to expected ones) relate to change in productivity via a parameter, mfphlyld .