Book review

G. Lopez-Cassanovas, B. Rivera, L. Currais (Eds.), Health and Economic Growth:

Findings and Policy Implications, The MIT Press, Cambridge, MA, 2005.

This book spans two clearly important subjects (health and economic growth) and the

reciprocal relationships between them. It consists of 13 chapters plus short introduction and

conclusion by the three editors. The jacket cover attempts to unify these themes by showing a set

of yellow syringes with blue numbers in the sequence 5, 10, 15, 20 (presumably growth rates)

running along the body of the syringes.

The chapters have not previously appeared in other outlets. Although this may look somewhat

like an edited conference volume, it appears from the preface that it was generated by inviting

chapter contributions from the foremost researchers in the field. Given the current style of

academic information dissemination one is entitled to wonder what the role of edited books of

hitherto unissued chapters is. The gold standard would be to generate new insights and awareness

from the synergy of bringing together the works collected in the same physical location. There

are basically three types of chapter, one is likely to get in such an enterprise

(i) So far unissued standard journal research style papers—the chapter which most

conspicuously falls into this category is Chapter 3 by Jamison, Lau and Wang with the

title ‘Health’s Contribution to Economic Growth in an Environment of Partially Endogenous

Technical Progress’ which proceeds to page 83 using not very recent data and then grafts on

an appendix with a Table using data for up to 2000 rather than reworking the chapter to

simply include this set of results in the main body. This paper mainly focuses on technical

progress and it comes to the conclusion that health does not influence technical progress.

(ii) Literature reviews—in this volume there seem to be only two of these which happen to be the

most useful and illuminating contributions in the book [Chapter 4 by Salai-Martin on the

Health-Poverty trap and Chapter 10 by T.P. Schultz on the impact of health on productivity in

low income countries.

(iii) Chapters which largely recapitulate existing published work by the authors but which may

seek to forge some new links in the light of the overall remit of the book.

All the chapters in this book bar Chapter 13 [by Bloom and Sevilla] fall more or less into the

above categories. This chapter is somewhat anomalous, relative to the rest, in that it contains

neither explicit modeling nor direct use of empirical evidence being instead use of some fairly

basic microeconomic analysis to explain why business does not get more involved in the fight

against HIV-AIDS. This would seem to be an argument so obvious that it hardly needs to be aired.

This chapter is the most policy related in the book but it does not go very deeply into the problems

of inducing more business participation in the problem.

http://www.elsevier.com/locate/ehb

Economics and Human Biology 4 (2006) 430–432

1570-677X/$ – see front matter # 2005 Published by Elsevier B.V.

doi:10.1016/j.ehb.2005.11.002

The 13 chapters are divided into five sections, respectively, titled: Health, Human Capital and

Economic Growth; Macroeconomics, Development and Health; Human Capital, Health and

Demography; Productivity, Labour Markets and Health; Quality of Life and the Welfare Costs of

AIDS. AIDS is the only disease that gets an explicit section or chapter to itself and it is a little

strange to see it termed as AIDS as this is not the generally acceptable terminology medically or

in most research areas. As the headings would tend to imply, the focus in this volume is very

much on the application of conventional mainstream economic ideas and methodology. There is

a fair smattering of standard theoretical growth models and the dominant empirical research

strategy revolves around Mincer type earnings functions with the human capital measures

augmented to allow for health influences.

Probably anyone who was asked to think about health and economic growth would come to

the conclusion that increased health might lead to increased growth rates and vice-versa. This

book presents the surprising (but true) idea that, for a long time, economists showed very little

interest in the first of these causal connections. Once economists began to take this on board,

empirical work naturally followed which seemed to establish the importance of health to growth.

However, things were unlikely to stay as simple as this and obstacles began to appear to the firm

belief in the positive association of growth with health. For one thing, the difficulty of measuring

health as a ‘stock of capital’ type of concept is frequently mentioned here although it is fair to say

that no progress is made in any of these chapters in dealing with this problem. In various chapters,

the problems of biased health-growth effects (from the reverse causation), sample selectivity bias

and weaknesses of data are shown to diminish the estimated impact of health on growth and in

some cases there are entirely respectable, conventional econometric studies which find no impact

of health on growth.

Given the difficulty of measuring health, the researchers tend to fall back on measures of

damage to the health stock, i.e. disease or proxies for health improvement such as improvements

in stature, nutrition, body mass index or life expectancy. There are a number of studies in this

book (and beyond), which rely on human capital earnings functions to demonstrate these

relationships. For example, Chapters 10 and 11 both give evidence for Brazil demonstrating

statistically significant relationships of log earnings to stature and of wage inequality to different

measures of disease.

It will probably already be evident that this book contains material of the type commonly

found in mainstream economic journal articles. This is both a strength and weakness of the book.

It is strength in the sense that the interested reader coming to the subject for the first time can

readily find a collection of representative professionally acceptable material. It is a weakness in

that we do not really get the synergy benefits of bringing the work of diverse authors together.

There is no evidence of any cross-fertilization between the chapters of this book. No attempt

seems to have been made to address matters of overlap and contradiction in the separate parts of

the volume. Leaving this aside the greatest shortcoming of the book is that it does not deliver very

much in terms of the policy implications.

The simplest way of arriving at a policy implication is to run a regression for national growth

rates or individual earnings and then look at the ‘t’ ratios on health capital variables and say

governments should or should not increase/decrease variable X in order to promote growth rates.

In essence, this is what most of this book is about. Unfortunately the excessive preoccupation

with supply-side determinants of individual earnings and the neglect of the global context of

individual growth leads to some serious weaknesses in the plausibility of the standard policy

conclusions even leaving aside the largely neglected issue of cost-benefit analysis of the

implementation of health-based growth policies. That is there is a possible fallacy of

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composition—just because individual earnings grow (or national income growth increases in

aggregate cross-section data) this does not mean that any specific health policy in any individual

country will necessarily increase economic growth. The bottom line is that we are fairly

convinced that health policies can improve human capital (improved stature, decreased

absenteeism, more units of parenting for children due to longer life etc.). It turn this may raise

output but the output has to be sold and if we were to focus on the world’s most health-poor

countries (basically those with the worst life expectancy rates) we may find that the increased

output from this group of countries runs up against problems of trade competitiveness which

mean the returns on health investment are much less than they might seem from standard

econometric studies. The problem may be worsened by a vicious cycle that failure to solve the

trade competitiveness problem may erode health gains and trap nations in a more or less

permanent ‘low health’ equilibrium.

Chapter 12 (on AIDS) by Philipson and Soares is something of a reaction against this

caricature of policy implications. It attempts to produce full welfare cost estimates of the disease

as opposed to ones based solely on market transactions. This is commendable although the

relationship to growth per se is a bit indirect in this paper.

In conclusion, one can say that this is a useful book for an experienced academic researcher.

One would be reluctant to recommend it for use on any kind of taught course as the student is

likely to be confused due to the lack of a clear overall picture coming through. I would however

particularly recommend, to any reader, Salai-Martin’s Chapter 4 which is wide-ranging yet

concise and to the point. It also gives some weight to the difficulties I have highlighted

above with the policy relevance of the mainly regression-driven chapters in the book.

Samuel Cameron

Bradford Centre for International Development,

University of Bradford, Bradford,

UK

E-mail address: samcameron@lineone.net

22 November 2005

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