Economic Research Forum (ERF)

Chronic illness and the labour market in Arab countries

169
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.

Most read

Fair competition is needed to empower women economically in the Arab world

The participation rates of women in the labour market in Arab countries are the lowest in the world. This column argues that remedying the under-representation of women in the labour force is a social and economic imperative for the region. There are three dimensions for action to realise the potential of Arab women: amending laws and regulations; instilling fair competition in markets; and promoting the digital economy.

Recession without impact: why Lebanese elites delay reform

The survival of Lebanon’s political elites is highly dependent on the wellbeing of the economy. Why then do they delay necessary reform to avoid crisis? This column examines the role of politically connected firms in delaying much-needed economic stabilisation policies.

Competition laws: a key role for economic growth in MENA

Competition policy lacks the attention it deserves in the countries of the Middle East and North Africa (MENA), a region characterised by monopolies and lack of market contestability. As this column explains, there are many questions about the extent of anti-competitive barriers facing new market entrants in the region. What’s more, MENA’s weak overall performance on competition is likely to be hindering economic growth and the path towards structural transformation.

The Egyptian economy is still not creating good jobs

Growth in Egypt has recovered substantially since the downturn following the global financial crisis and the political instability following the 2011 revolution – but what has happened to jobs? This column reports the results on employment conditions from just released data in the 2018 wave of the Egypt Labor Market Panel Survey.

How Egyptian households cope with shocks: new evidence

Managing risks and reducing vulnerability to economic, social, environmental and health shocks enhances the wellbeing of households and encourages investment in human capital. This column explores the nature of shocks experienced by Egyptian households as well as the coping mechanisms that they use. It also examines the relationship between such risks and job formality and health status.

The future of Egypt’s population: opportunities and challenges

Egypt’s potential labour supply depends on the growth and changing composition of its working-age population. This column reports the latest data on labour supply and fertility rates, concluding that the country has a window of opportunity with reduced demographic pressures to try to address longstanding structural challenges for the labour market.

Egypt’s labour market: facts and prospects

An ERF policy conference on the Egyptian labour market in late October 2019 focused on gender and economic vulnerability. This column summarises the key takeaways from the event.

Arab countries are caught in an inequality trap

Conventional wisdom, based mainly on surveyed household income distribution statistics, suggests that inequality is generally low in Arab countries. At the same time, little attention has been devoted to social inequalities, whether in terms of outcomes or opportunities. This column introduces a forthcoming report, which offers a different narrative: based on the largest research project on the subject to date and covering 12 Arab countries, the authors argue that the region is caught in an inequality trap.

Domestic demand and competition: a new development paradigm for MENA

A lack of competition in domestic and regional markets is holding back development in the Middle East and North Africa. This column argues that the region and the international community must ensure that barriers to market entry and exit are eliminated, and that independent regulatory bodies at the national and regional levels help to promote domestic demand as the main engine for sustainable and inclusive growth.

Supporting women’s livelihoods in Egypt: opportunities and challenges

Despite the rising educational attainment of women in Egypt, their employment has declined over time and many face multiple constraints on their engagement in the labour market. This column explores ways of increasing women’s assets and economic empowerment that may ultimately lead to Egypt being as equitable in employment attitudes and practices as it is in education.