Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/280723 
Year of Publication: 
2023
Series/Report no.: 
GLO Discussion Paper No. 1360
Publisher: 
Global Labor Organization (GLO), Essen
Abstract: 
This paper investigates the indirect economic impact of tuberculosis epidemic in one of the high-burden countries, focusing on the productivity at the individual level measured by the average wages and at firm level measured by the average total factor productivity (TFP). We use unique administrative data collected at the level of firms and regions for 2003-2009 and find that the ongoing tuberculosis (TB) epidemic has considerable indirect economic costs in terms of lost productivity and related inefficien- cies. First of all, both firms and individuals in regions with higher TB prevalence have significantly lower TFP and wages. Moreover, consistent with the Compensating Wage Differentials theory and after controlling for the TB prevalence, the risk of contracting the disease - TB incidence rate - is associated with higher wages and higher produc- tivity - a kind of premium for individuals and firms to operate in a risky environment. The latter can also be viewed as a source of inefficiency as this may prevent firms from entering more competitive markets. Additional analysis reveals strong spatial effects which are consistent with the infectious nature of the diseases and emphasize the im- portance of containing the epidemic. Overall, we estimate that a 10% decrease in the TB prevalence can lead to a 1.05% gain in GDP: 0.15% in terms of higher individual productivity and 0.89% in terms of firms' productivity.
Subjects: 
Tuberculosis
Productivity
Regional Wage
Total Factor Productivity
TB Epidemic
JEL: 
O18
I15
J24
Document Type: 
Working Paper

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