Transcript What are the economic consequences of adult ill

What are the economic
consequences of adult illhealth in Russia?
Marc Suhrcke
[email protected]
WHO European Office for Investment for Health
and Development (Venice)
Sustainable economic growth
without health in Russia?
GNI pc Atlas method current US$
Life expectancy at birth
3000
2500
68
67
2000
66
1500
65
1000
500
64
1998
1999
2000
2001
2002
2003
Source: World Bank WDI 2005; WHO/EURO HFA database 2005
Relevant channels from health
to the economy: a simple framework
Labour
productivity
Labour
supply
HEALTH
Education
Saving
ECONOMY
Assessing the economic
consequences of
adult ill-health
A) Past and current impact
of adult ill-health
on economic outcomes
B) Projected macroeconomic
benefits of improving
adult health
Annual days of absence due to
illness per employee:
Russia vs. EU15
14
Male
Female
12
10
10.9
10.8
9.2
10.3
9.6 9.4
9.5
8.6
8
EU-15: 7.9
(M: 6.9, F: 9.0)
6
4
2
0
2000
2001
2002
2003
Source: calculations based on RLMS rounds 2000-2003; EU-15 value is from ESWLC 2000
Costs of absenteeism due to
illness in Russia
2003
Total wage loss
(US$ billion)
Total wage loss as
share in GDP
Total production (GDP)
loss (US$ billion)
Total production loss
as share in GDP
60.96
0.71%
112.87
1.31%
Source: Suhrcke/Rocco/McKee et al (2005), calculations based on RLMS absenteeism data
The impact of ill health on labour
productivity and supply
Self-reported good health increases the wage rates
by 22% for women and by 18% for men, compared to
those who were not in good health
A workday missed due to illness reduces the wage rate
by 5.5% for females and 3.7% for males
An ‘average’ Russian male aged 55 would be expected to
retire at 59. With chronic illness he retires at 57.
The impact of chronic illness on
early retirement
Probability of retiring in subsequent period for
average male individual:
0.7
0.62
Not chronically ill
0.6
0.56
Chronically ill
0.5
0.43
0.40
0.4
0.32
0.29
0.3
0.2
0.23
0.18 0.18 0.21
0.1
0
> 95th
Richest
75th - 95th
50th - 75th
25th - 50th
Income percentiles
Source: Panel logit regression as described in Suhrcke/Rocco/McKee et al. 2005
< 25th
Poorest
High alcohol consumption significantly increases the
probability of job loss.
The death of a household member affects other
household members’ welfare:
- alcohol consumption up by 10 grams per day
-probability of suffering depression up by more
than 50%
Chronic illness affects household incomes:
- annual loss of 5.6% of per capita income
(1998-2000)
Projecting the impact of
3 future adult mortality
scenarios on economic growth
Predicted GDP per capita (US$) based
(conservative estimate):
17,000
Scenario 3
Scenario 2
Scenario 1
15,000
13,000
11,000
9,000
Source: Suhrcke/Rocco/McKee et al 2005
20
25
20
20
20
15
20
10
20
05
20
00
7,000
Difference in projected GDP per capita
between scenario 1 (‘status quo’)
and scenario 3 (‘reach EU15’)
Conservative
estimate
(see graph)
Less
conservative
estimate
2005
$ 105
$ 324
2025
$ 2,856
$ 9,243
Source: Suhrcke/Rocco/McKee et al 2005
Sustainable economic growth
without health in Russia?
GNI pc Atlas method current US$
Life expectancy at birth
3000
2500
68
67
2000
66
1500
65
1000
500
64
1998
1999
2000
2001
2002
2003
Source: World Bank WDI 2005; WHO/EURO HFA database 2005