Economic Impacts of Investing in Universal Health Coverage for Low- and Lower-Middle Income Countries

Abstract

We estimate the economic impacts associated with investing in Universal Health Coverage (UHC) of Childhood diseases (Malaria, Diarrhea, Pneumonia), Noncommunicable diseases, Tuberculosis, and HIV/AIDS in ten low- and lower-middle income countries that account for 67% of deaths worldwide, for the 2019-2023 period. We model the development-accounting mechanisms of improved health status and economic performance for these countries using a human capital augmented Solow model which incorporates cost effects on physical capital and demographic impacts on labor supply. The underlying dynamics of improvements in health and their effects on economic growth are quite heterogeneous across countries. On average, achieving UHC increases GDP by 0.54% and per capita GDP by 0.14% over a five year period. However, the gains in large countries that are well along the demographic and epidemiological transitions (India, China, Indonesia, Brazil) are smaller (less than 1% of GDP) than those in countries with less advanced transitions (Nigeria, Pakistan, Bangladesh; 2-4% of GDP). Sub-Saharan African countries (D.R. Congo, Angola, Ethiopia) show wide variability in gains (with a mean gain of 1-6% of GDP). Overall, our results are consistent with those presented in the WHO investment case.