The economic impact of malaria on wage earnings in Kenya: a household level investigation

Abstract

Malaria remains one of t he most severe diseases facing Sub - Saharan African. The global incidence of the disease is estimated at 350 to 500 million clinical cases annually, resulting in 1. 5 to 2.7 million deaths each year in sub - Saharan Africa and parts of Asia. In Kenya, malaria is the leading cause of morbidity and accounts for 19 per cent of hospital admissions and between 30 - 50% of outpatient cases in public health institutions. In addition to its health effect, the disease imposes serious social and economic burden on individu als and households. It is also estimated that the total cost burden due to malaria in Africa increased from US dollars 1.8 billion in 1995 to US dollars 2 billion. While a great deal of research effort has been placed on the cost burden of malaria on house holds, comparatively little research, particularly in Kenya, has investigated the impact of malaria on wage earnings. Even rarer in previous work is the failure to address the endogeneity problem of malaria when estimating the effect of the disease on wage earnings. The objective of this study was to provide empirical evidence of the impact of malaria on wage earnings among households in Kenya. Methods: The analysis was based on data drawn from Welfare Monitoring Surveys conducted by the Government of Ke nya. The data provided information on individual and household socio - economic characteristics, sources of wage earnings community variables such as time taken to collect water and firewood during the wet and dry seasons . Two analytic samples were construct ed, a full probability sample comprising households inflicted with malaria and other diseases and a sub - sample of healthy individuals and those having malaria. Results: Based on the OLS results the coefficient on malaria exhibited the expected negative s ign. The coefficient is significant at the 1% level, reflecting that an increase in malaria prevalence is associated with a decrease in wage earnings. Specifically , a 10% increase in the proportion of individuals affected by Malaria is associated with a re duction of 3.3% of wage earnings. The negative sign continues regardless of the method of estimation. The 2SLS results indicate that an increase in malaria prevalence reduces the l og of wage earnings by 3.81. This implies that individuals afflicted by mala ria have 44% lower wage earnings compared to healthy individuals. Also of interest is the coefficient on other diseases which has the expected negative sign and is statistically significant at the 5% level. Conclusion: Individuals are likely to lose a si gnificant proportion of their wage earnings if one suffers from malaria. However, investments in malaria control programmes have large economic returns because they make an immediate contribution to wage earnings by increasing the quantity and quality of l about, primarily through reductions in morbidity, debility, and absenteeism from work.