Impact of Health on Labour Supply and Wages: A Case of Agricultural Workers in West Bengal

In an agrarian economy economic impact of illness acts not only through out of pocket expenditure, but also through loss of labour time and wages at the individual level. Using the information collected from 676 respondents at selected villages in West Bengal from 2009 to 2010, the present paper examines the impact of health on labour supply behaviour and wages. Theoretically the study borrows the idea of nutrition-based efficiency wage hypothesis and builds a conceptual framework based on capability approach. The methodology follows a household production function model. Nutritional dimension of health as indicated by body mass index (BMI) has been found to have a positive and significant impact on labour supply for both the male and female respondents. Age is found to have significantly non-linear impact on labour supply. Hence, public policies to improve the sex and age composition of the households through appropriate channels, that is, health and fertility may be necessary. Finally, the results suggest a revision in the design of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) programme by integrating it with other developmental programmes on health, sanitation and skill development in order to ensure productivity of rural manual labourers. Experience of some other countries like South Africa and Brazil suggests the need to integrate public works programmes with programmes that target health and family welfare issues particularly in the context of...
Source: Journal of Health Management - Category: Health Management Authors: Tags: Articles Source Type: research