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ISER Working Paper Series 2019-04

Productivity effects of dengue in Brazil

Authors

Publication date

23 May 2019

Abstract

Although understanding the role of health in driving labor market outcomes is a matter of great importance, it has proven difficult to isolate this effect due to empirical challenges and a lack of compelling sources of identification. We obtain causal estimates of the effect of health on income and welfare dependency through two different channels: a negative health shock (dengue outbreak) and a positive health shock (opening of a health-care facility). To do this, we rely on instrumental variables and difference-in-difference methods, as well as on novel datasets. We find that dengue outbreaks lower the average working hours and income. This effect is particularly high for low-income individuals, but conditional cash transfer programs can insulate them from this shock. On the other hand, the opening of a new health-care facility in a families catchment area rises family per capita income and employment. All together, this evidence suggest that health shocks are an important part of income, poverty and welfare dependency.

Subjects

Labour Market, Economics, Poverty, Welfare Benefits, Income Dynamics, and Health

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