Health Burdens and Labor Productivity in Africa’s Middle- and Low-Income Economies: Implication for the COVID-19 Pandemic

Abstract

The effect of health burdens on labour productivity in Africa's middle and low-income economies in the advent of Covid-19 pandemic was investigated in this paper. It employed Common Correlated Effects (CCE) estimation of Heterogeneous Dynamic Panel data Models to estimate a sample of 45 African countries with 30-panel series from 1990 to 2020. The authors discovered that the Covid-19 epidemic has aggravated the catastrophic health burdens (morbidity and mortality rates) in the panel countries. It shows that health burden has dynamic negative long-term spilling effect on labour productivity, such that a 1% increase in health burden, ceteris paribus, would reduce labour productivity by 13% in the upper middle income economy, 17% in the lower middle income economy, and 19% in the low-income economy, respectively. The findings also show divergence effects; with low- and lower-middle-income nations bearing the highest brunt of health burden crises due to Covid-19 pandemic and its mitigation measures, even in the face of inadequate health systems, lowering their labour productivity. As a result of this finding, an increase in health burdens devalues these countries' labour assets and raises the health risk of overburdened economies. The paper proposes that Africa countries should develop a regional inclusive health scheme with a financing target to raise the health system with particular attention to the low and lower-income countries. A healthy child grows into a productive adult in the future; hence the African Union should enact and enforce a regional health program that provides free child healthcare.