Ill-health and labour market outcomes in Uganda: evidence from 2005/06 national household survey
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This study set out to examine the impact of ill-health on labour market outcomes in Uganda using UNHS 2005/06. Specifically, the study examined the potential economic loss of ill-health and the effects of ill-health on labour market participation, productivity and labour supply across gender and residence. We estimated three models: labour market participation, labour productivity and labour supply models. Ordinary Least Squares and two-stage Instrumental variable estimation methods were used to estimate the impact of ill-health on productivity and labour supply. The study results show that the cost of absenteeism due to ill-health was estimated to be equivalent to USD 1. 8m per year, about 0.02% of GDP in 2005. The annual average number of days worked falls as health state deteriorates and that poor health significantly lowers the number of days worked in year compared to good health. Malaria was found to be a major cause of illness among workers despite the existing cost-effective and efficacious interventions to combat malaria. The study recommends increased support to the health sector to enhance performance of the existing health interventions and improve access to healthcare services particularly to the poor. The study revealed that ill-health negatively impacts economic growth through reduced economic output due to work absenteeism. This is implies that investment in health programs has economic value by averting GDP loss due to poor health of workers. In addition, ill-health of workers affects labour market outcomes through labour supply and labour force participation but not labour productivity. The results therefore calls for health improving interventions in countries were funding to the health sector as remained low and stagnant. The improvement in labour participation and supply as result of improved health generates economic benefits to worker, the household, employer and overall economy and therefore a feasible poverty-reducing strategy.