Economic Research Forum (ERF)

Chronic illness and the labour market in Arab countries

803
Chronic illnesses are widespread in the Arab countries – and they have damaging consequences for labour market participation and wider economic performance. Drawing on evidence from Egypt and Tunisia, this column proposes a package of practical actions to protect workers from becoming victims of chronic diseases – and to reduce the losses of income, labour supply and labour productivity.

In a nutshell

Chronic illness is an economic burden across the whole Arab region: the resulting reductions in labour force participation have significant negative consequences for growth.

Policy-makers in public health should initiate health awareness campaigns to promote people’s acceptance and use of preventive measures against chronic diseases.

Achieving universal health coverage should be at the top of development agenda of Arab countries.

The prevalence of obesity and smoking –and a lack of awareness of the importance of physical exercise – mean that a large number of people in the Arab world are victims ofchronic diseases, such as diabetes, hypertension and respiratory and cardiovascular problems. The incidence of these diseases is one of the main causes of high mortality and morbidity in the region.

In addition, a large share of Arab workers are employed in the informal sector. They mostly lack health insurance coverage to protect them from illness and its other negative consequences, such as catastrophic health spending. Thus, the inception of sickness is likely not only to reduce work productivity but also to drive people out of the labour market.

The high incidence of chronic illnesses increases absenteeism rates and leads to significant losses in workers’ incomes. Thus, good health status represents a very important asset for workers, the loss of which has serious implications for their labour supply decisions, their incomes, their assets and their productivity.

Chronic illness and the labour market in Egypt and Tunisia

Our research analyses data from the Labor Market Panel Surveys for Egypt (ELMPS 2012) and Tunisia (TLMPS 2014). The results indicate that the prevalence of chronic diseases has a significant negative impact on labour force participation in both countries (Ebaidalla and Ali, 2018).

While our findings are specific to Egypt and Tunisia, they draw attention to the economic burden of chronic illness across the whole Arab region. The findings also warn of the financial burden resulting from chronically ill people dropping out of the labour market. Reductions in labour force participation due to illness have significant negative consequences for economic growth in these countries.

What can be done to reduce the effect of chronic illness on labour market participation?

Given the increasing trend of chronic diseases coupled with the economic burden associated with those diseases, Arab countries need sound health, economic and 2 social policy to protect workers from becoming victims of chronic diseases – and to reduce the negative effects on labour productivity and economic growth. These measures may include the following.

Improving healthcare systems

Enhancing healthcare systems is essential for improving the health of the workforce. That requires the adoption of measures to protect workers from the negative consequences of chronic illness. These may include early inspection of chronic diseases and the provision of sufficient healthcare to workers with chronic illness. In addition, investments in health education, food policies and urban physical infrastructure are needed to support healthcare systems.

Adopting preventive health measures

Policy-makers in public health should initiate health awareness campaigns to promote people’s acceptance and use of preventive measures against chronic diseases. These campaigns must be delivered in a form that can be digested by the average citizen. In areas with particular cultural characteristics, campaign programmes should be conducted in local languages.

Adopting healthy lifestyle systems

The rising prevalence of risk factors for chronic diseases such as smoking, overweight, obesity and ageing of the population will have significant effects on the potential productive capacity of the future Arab workforce. Therefore, changing lifestyles and behaviours related to smoking, physical activity and diet is crucial.

Overweight is a widespread phenomenon in the Arab region, with levels comparable to other developing and developed countries. The education system can play an important role in changing diets, physical activity patterns and other aspects of lifestyle. School curricula should include principles and standards on health and environmental change.

Economic policies to promote healthy behaviours

Economic policies that promote healthy behaviours and choices need to be adopted by Arab policy-makers. For example, measures that influence diet and physical activities deserve careful consideration because they support healthy behaviours. Consider the following examples:

  • High taxes on tobacco to control tobacco consumption.
  • Subsidies that discourage consumption of less healthy foods, such as sugar, refined grains, beef and high-fat dairy products, as opposed to fruit and vegetables.
  • Policies to promote the use of public transport, walking and riding bicycles, such as better infrastructure, discounts on transport fares and secure bicycle parking.

Extending health insurance

Given low participation rates in health insurance packages, particularly in the informal sector, health insurance must be expanded to include the poorest groups in society. There should be a particular focus on those in rural areas and informal workers, as well as unpaid family workers, to improve access to relevant healthcare services. Achieving universal health coverage should be at the top of development agenda of Arab countries.

Further reading

Ebaidalla, E Mahjoub, and Mohammed E Ali (2018) ‘Chronic Illness and Labor Market Participation in Arab Countries: Evidence from Egypt and Tunisia’, ERF Working Paper No. 1229.

Willett, W, J Koplan, R Nugent, C Dusenbury, P Puska and T Gaziano (2006) ‘Prevention of Chronic Disease by Means of Diet and Lifestyle Changes’, World Bank.

Tags: , , , ,

Most read

EU climate policy: potential effects on the exports of Arab countries

The carbon border adjustment mechanism aims to ensure that Europe’s green objectives are not undermined by the relocation of production to parts of the world with less ambitious climate policies – but it could impose substantial costs on developing countries that export to the European Union. This column examines the potential impact on exporters in the Arab world – and outlines possible policy responses that could mitigate the economic damage.

Financial development, corruption and informality in MENA

Reducing the extent of informality in the Middle East and North Africa would help to promote economic growth. This column reports evidence on how corruption and financial development influence the size of the informal economy in countries across the region. The efficiency of the financial sector in MENA economies reduces the corruption incentive for firms to seek to join and stay in the formal sector.

Green hydrogen production and exports: could MENA countries lead the way?

The Arab region stands at the threshold of a transformative opportunity to become a global leader in green hydrogen production and exports. But as this column explains, achieving this potential will require substantial investments, robust policy frameworks and a commitment to technological innovation.

Climate change threats and how the Arab countries should respond

The Arab region is highly vulnerable to extreme events caused by climate change. This column outlines the threats and explores what can be done to ward off disaster, not least moving away from the extraction of fossil fuels and taking advantage of the opportunities in renewable energy generation. This would both mitigate the potential for further environmental damage and act as a catalyst for more and better jobs, higher incomes and improved social outcomes.

Child stunting in Tunisia: an alarming rise

Child stunting in Tunisia seemed to have fallen significantly over the past two decades. But as this column reports, new analysis indicates that the positive trend has now gone dramatically into reverse. Indeed, the evidence is unequivocal: the nutritional health of the country’s youngest citizens is rapidly deteriorating and requires immediate and decisive action.

Freedom: the missing piece in analysis of multidimensional wellbeing

Political philosophy has long emphasised the importance of freedom in shaping a meaningful life, yet it is consistently overlooked in assessments of human wellbeing across multiple dimensions. This column focuses on the freedom to express opinions, noting that it is shaped by both formal laws and informal social dynamics, fluctuating with the changing cultural context, particularly in the age of social media. Data on public opinion in Arab countries over the past decade are revealing about how this key freedom is perceived.

Exchange rate undervaluation: the impact on participation in world trade

Can currency undervaluation influence participation in world trade through global value chains (GVC)? This column reports new evidence on the positive impact of an undervalued real exchange rate on the involvement of a country’s firms in GVCs. Undervaluation acts as an economy-wide industrial policy, supporting the competitiveness of national exports in foreign markets vis-à-vis those of other countries.

New horizons for economic transformation in the GCC countries

The countries of the Gulf Cooperation Council (GCC) have historically relied on hydrocarbons for economic growth. As this column explains ahead of a high-level ERF policy seminar in Dubai, emerging technologies like artificial intelligence, blockchain and robotics – what some call the fourth industrial revolution – present a unique opportunity for the region to reduce its dependence on oil and make the transition to a knowledge-based economy.

Shifting public trust in governments across the Arab world

The Arab Spring, which began over a decade ago, was driven by popular distrust in governments of the region. The column reports on how public trust has shifted since then, drawing on survey data collected soon after the uprising and ten years later. The findings reveal a dynamic and often fragile landscape of trust in Arab governments from the early 2010s to the early 2020s. Growing distrust across many countries should raise concerns about future political and social instability.

Corruption in Iran: the role of oil rents

How do fluctuations in oil rents influence levels of corruption in Iran? This column reports the findings of new research, which examines the impact of increases in the country’s oil revenues on corruption, including the mechanisms through which the effects occur – higher inflation, greater public spending on the military and the weakness of democratic institutions.




LinkedIn