Investment

Possibly even more important than the impact on productivity is health’s impact on investment. What we mean by investment is any sort of expenditure that makes someone more productive in the future.

The most prominent form of investment in developing countries is a child’s education. Poor health disproportionately affects children, this typically results in high absenteeism from school. Chronic absences due to illness negatively impact a child’s educational attainment, which causes them to earn lower wages as adults. The costs associated with poor health can be quite large in economic terms. A study in Latin America showed that a child who grew up Malaria free earned 50% more per year for his entire adult life.

Other investment (in say businesses, farming equipment, etc.) is also hindered by poor health. The low life expectancy in developing countries makes large scale investment untenable because of uncertainty regarding whether someone will live long enough to enjoy the benefits.