Abstract
Recent data shows that social and economic conditions of rural dwellers are worsening in Cameroon. This paper estimates the link between parental education and household economic wellbeing (ECW). It also relates household health to household ECW, jointly education and health to ECW. Data employed are from a national survey conducted by the National Institute of Statistics in 2011. The unitary household economic model is the theoretical foundation. Empirical models specified are estimated using different methods. OLS is employed to estimate the link between education and ECW. One result on which the paper insists is obtained from a non-linear control function specification. Two salient results are highlighted. i) Education appears to be a significant determinant of household health. ii) Education and health are not perfect substitutes in the household utility function. These findings could guide policymakers in search for effective health and education programs aimed at improving rural economic wellbeing.
Highlights
According to the World Health Organization (WHO, 2001), health is a thorough state of physical, mental and social comfort
These results are going to be presented in the following order. i) linking household education to household health; ii) estimating the household economic wellbeing production function; iii) Deducing the estimated joint effects of education and health on the household economic wellbeing
Column (1) presents results of maximum likelihood (ML) estimates of the structural parameters of Equation 15; Columns (2) and (3) are the joint maximum likelihood estimates of the Heckman selection model of the structural parameters, correcting for potential sample selection bias, respectively; Column (4) is the first-stage least squares estimates of the reduced form of the literacy equation; column (5) is the General Method of Moment (GMM) estimates of the structural parameters accounting for potential endogeneity (the data on household health have the form of Poisson law); Columns (6) and (7) are control functions estimates
Summary
According to the World Health Organization (WHO, 2001), health is a thorough state of physical, mental and social comfort. A healthy individual is likely to be more productive than an individual suffering from poor health, meaning that health is a family/household and individual production factor (Grossman, 1982; Culyer and Newhouse, 2000; Mwabu, 2009, etc.). Better health for all the household members may result in savings on medical expenditures. The resources saved due to the better household‟s health status, will complement the individual‟s and household‟s income, soften their budget constraint, acquire more educational inputs, and, later on, improve on their social and economic wellbeing. These transmissions channels could be described as the health-wealth virtuous circle
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