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  • HC Investment Health & In. Health Poliy Costs & Benets of Edu. Growth Child labor Disrimination Int. Migration

    Eonomi Development in Asia

    Human Resoures: Eduation, Health and Labor

    Tomoki Fujii

  • HC Investment Health & In. Health Poliy Costs & Benets of Edu. Growth Child labor Disrimination Int. Migration

    Outline

    I

    Human Capital Investment: From general framework of

    investment deision-making

    I

    Investment deision making

    I

    Health and Inome

    I

    Costs and Benets of Eduation

    I

    Gender

    I

    Migration

  • HC Investment Health & In. Health Poliy Costs & Benets of Edu. Growth Child labor Disrimination Int. Migration

    Human Capital Investment

    I

    Not everyone is equal in produtivity. People differ in their

    produtivity.

    I

    Physial strength

    I

    Cognitive skills

    I

    Communiation skills

    I

    Appearane

    I

    Some of these differenes are geneti.

    I

    People an investment in their

    :::::::::::::::

    .

    I

    Health

    I

    Eduation

    I

    Voational training

  • HC Investment Health & In. Health Poliy Costs & Benets of Edu. Growth Child labor Disrimination Int. Migration

    Investment Deisions

    I

    Investment deisions involve both ost and benet

    onsiderations. Let the size of investment be x.

    I

    B

    0

    (x) [C

    0

    (x): benets [ost from investment of size x.

    I

    Minimum investment size, dereasing marginal benet

    I

    Fixed ost of investment, onstant marginal ost

    I

    NB

    0

    (x) = B

    0

    (x) C

    0

    (x): Net benet

    I

    When net benet is

    maximized,

    :::::::::::::

    , or

    B

    0

    0

    (x) = C

    0

    0

    (x).

    x

    $ B(x)

    C(x) NB Maximized

    Fixed cost of

    investment

  • HC Investment Health & In. Health Poliy Costs & Benets of Edu. Growth Child labor Disrimination Int. Migration

    Food intake as investment

    I

    Let F be the amount of food you

    onsume.

    I

    Output I(F ) is produed.

    I

    Cost of food C(F ) is proportionate to

    F .

    I

    Suppose that you want to maximize the

    surplus I(F ) C(F ).

    I

    Applying the previous model, a rational

    individual would hoose investment

    level F

    to maximize the surplus.

    I

    If the individual is redit onstrained

    and start from F < F

    1

    , the F would

    onverge to zero.

    F

    C(F)

    Maximized

    Surplus

    F* F0

    F1

    $

    I

    This an be

    onsidered nutrition

    poverty trap (More

    on poverty trap in

    Le. #5).

  • HC Investment Health & In. Health Poliy Costs & Benets of Edu. Growth Child labor Disrimination Int. Migration

    Child Malnutrition (1)

    I

    The previous model is oversimplied, but it does show the

    possibility of poverty trap.

    I

    Note that a sizable proportion of spending typially go to

    non-food spending.

    I

    See also Chap. 2 of Banerjee and Duo.

    I

    More realisti dynami interpretation would be as follows:

    I

    You are poor beause you were malnourished as a hild.

    I

    Sine you are poor, your hildren are also malnourished.

    I

    In fat, hild malnutrition is important as it has serious

    long-term negative effets (See, Grantham-MGregor et al.

    (2007)):

    I

    Height lost due to malnutrition annot be reovered.

    I

    Cognitive skills are negatively affeted by malnutrition.

    I

    Malnutrition an result in permanent disability.

  • HC Investment Health & In. Health Poliy Costs & Benets of Edu. Growth Child labor Disrimination Int. Migration

    Child Malnutrition (2)

    I

    So far, we only onsidered only the lak of food intake.

    I

    Insufient energy intake indeed leads to malnutrition.

    I

    Deieny of mironutrients are also important.

    I

    ::::::

    deieny: Can lead to goiter (abnormally enlarged

    thyroid gland) and mental retardation.

    I

    ::::

    deieny: Can lead to anemia. Assoiated with

    poorer mental, motor, soio-emotional or neurophysiologi

    funtioning.

    I

    :::::::::

    deieny: Can result in blindness.

  • HC Investment Health & In. Health Poliy Costs & Benets of Edu. Growth Child labor Disrimination Int. Migration

    Child Malnutrition (3)

    I

    Lak of adequate hild are also leads to malnutrition.

    I

    Pratie good hygiene (wash hands; use lean utensils,

    ups and bowls; store food properly)

    I

    Pratie responsive feeding

    I

    Adequate stimulations

    I

    Diseases also leads to malnutrition. Major issues inlude:

    I

    ::::::::

    (Esp. prevalent in the rst two years of life. About

    1/4 to 1/3 of the observed growth failure is attributable to

    enteri infetions (Brown, 2003).)

    I

    :::::::

    (Inreased risk of death and neurologial and

    ognitive impairments)

    I

    Intestinal parasites (Poor language performane)

    I

    HIV/AIDS (Higher mortality, brain problems and inreased

    risk of development retardation)

  • HC Investment Health & In. Health Poliy Costs & Benets of Edu. Growth Child labor Disrimination Int. Migration

    Magnitude of the hild malnutrition

    I

    Grantham-MGregor et al. (2007) estimate that 28% of

    hildren under ve in developing ountries are stunted.

    I

    Prevalene of malnutrition is highest in South Asia and

    Sub-Saharan Afria.

    I

    These hildren are prevented from realizing their

    developmental potential beause of malnutrition.

  • HC Investment Health & In. Health Poliy Costs & Benets of Edu. Growth Child labor Disrimination Int. Migration

    Health and inome (1)

    I

    Overall health indiators generally improve as the ountry

    develops.

    I

    People grow taller as the ountry get riher.

    I

    Men's average height in Great Britain rose by 9.1 m

    between 1775 and 1975.

    I

    Prop. of young Duth men shorter than 168m fell from 2/3

    in 1855 to 2% today.

    I

    Just in a entury, average height of Japanese men at the

    age of 18 inreased by 13m. Height is very losely

    orrelated with the inome level (see above).

    I

    Height is indeed related to produtivity.

    I

    In Brazil, where malnutrition is extensive, a 1% differene in

    height is assoiated with a 7.7% differene in wages. In US,

    a 1% differene in height is assoiated with a 1% differene

    in wages.

    I

    Morbidity, mortality and life expetany are also often used.

  • HC Investment Health & In. Health Poliy Costs & Benets of Edu. Growth Child labor Disrimination Int. Migration

    Health and inome (2)

  • HC Investment Health & In. Health Poliy Costs & Benets of Edu. Growth Child labor Disrimination Int. Migration

    Cross-ountry relationship

    I

    In rih ountries, life expetany ranges approximately

    between 75 and 80 years, while most of the poorest

    ountries have a life expetany below 60 years.

    I

    In Latin Ameria, the rihest 20% has per-apita food

    onsumption that is 50% larger than that of the poorest

    20% of the population.

  • HC Investment Health & In. Health Poliy Costs & Benets of Edu. Growth Child labor Disrimination Int. Migration

    Interation of Health and Inome (1)

    I

    Better health ausing higher inome

    I

    If you are too unhealthy, you annot work.

    I

    In the UK, the poorest 20% adults in 1780 were so badly

    nourished they did not have the energy for even one hour of

    manual labor per day. By 1980, suh malnutrition had been

    ompletely eliminated, ontributing to the inrease of output

    by 25%.

    I

    Inreased alori intake ontributed to further 56% inrease

    in the amount of labor input that ould be provided. These

    effets ombined, better nutrition raised output by a fator

    of 1:25 1:56 = 1:95 over 200 years, or 0.33% per year,

    a

    ording to Fogel (1997).

    I

    But the reverse ausality is possible.

  • HC Investment Health & In. Health Poliy Costs & Benets of Edu. Growth Child labor Disrimination Int. Migration

    Interation of Health and Inome (2)

    I

    Higher inome ausing better health

    I

    Riher people an afford sufient amount of food, lean

    water, mediine, better and safer living and working

    environment, and better health servies.

    I

    Average number of dotors per 1,000 people is 2.2 in rih

    ountries, 0.8 in the world, and 0.3 in sub-Saharan Afria.

    I

    A third fator orrelated with health and inome (e.g.,

    ommuniation and transportation infrastruture)

    I

    Improved road helps market a

    ess of a remote village.

    I

    This an help inrease the inome level of the village.

    I

    At the same time, the patients an reah the nearest lini

    more easily.

  • HC Investment Health & In. Health Poliy Costs & Benets of Edu. Growth Child labor Disrimination Int. Migration

    Modeling Inome to Health

    I

    Health h(y; a) and inome

    y(h; b).

    I

    Parameters a and b affet

    only

    :::::::

    and

    ::::::::

    respetively.

    I

    You an think of a as

    a

    ess to lean water and

    b as prodution tehnology.

  • HC Investment Health & In. Health Poliy Costs & Benets o