Economic Research Forum (ERF)

Chronic illness and the labour market in Arab countries

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

Sustaining entrepreneurship: lessons from Iran

Does entrepreneurial activity naturally return to long-term average levels after big economic disturbances? This column presents new evidence from Iran on trends in entrepreneurship among various categories of firm size, sector and location – and suggests policies that could be effective in promoting entrepreneurial activities.

Happiness in the Arab world: should we be concerned?

Several Arab countries have low rankings in the latest comparative assessment of average happiness across the world. But as this column explains, the average is not a reliable summary statistic when applied to ordinal data. The evidence from more robust analysis of socio-economic inequality in happiness suggests that policy-makers should be less concerned about happiness indicators than the core development objective of more equitable social conditions for citizens.

Financial constraints on small firms’ growth: pandemic lessons from Iran

How does access to finance affect the growth of small businesses? This column presents new evidence from Iran before and during the Covid-19 pandemic – and lessons learned by micro, small and medium-sized enterprises.

The economics of Israeli war aims and strategies

Israel’s response to last October’s Hamas attack has led to widespread death and destruction. This column outlines the impact thus far, including the effects on food scarcity, migration and the Palestinian economy in both Gaza and the West Bank.

It’s too early to tell what happened to the Arab Spring

Did the Arab Spring fail? This column presents a view the consensus view from ERF’s recent annual conference in Morocco: careful analysis of the fundamental drivers of democratic transitions suggests that it’s too early to tell.

Arab regional cooperation in a fragmenting world

As globalisation stalls, regionalisation has emerged as an alternative. This column argues that Arab countries need to face the new realities and move decisively towards greater mutual cooperation. A regional integration agenda that also supports domestic reforms could be an important source of growth, jobs and stability.

Gender differences in business record-keeping and planning in Iraq

Only one in every ten informal businesses in Iraq is led by a woman. Yet as research summarised in this column reveals, those businesses are more likely to set budgets and sales targets, and to keep business records. This may be evidence of the role of social exclusion in motivating greater reliance on the formal bureaucratic system.

Self-employment in MENA: the role of religiosity and personal values

How important are individual’s values and beliefs in influencing the likelihood that they will embrace the responsibilities, risks and entrepreneurial challenge of self-employment? This column presents evidence from 12 countries in the Middle East and North African region on the roles of people’s religiosity and sense of personal agency in their labour market choices.

Reformed foreign ownership rules in UAE: the impact on business entry

In an effort to stimulate economic growth and diversify the economy, the government of the United Arab Emirates has recently implemented regulatory reform that allows 100% foreign ownership of companies operating in the country. This column examines the implications of the reform for entry of new firms in Dubai, using unique data on new business licences in the emirate.

Conflict and debt in the Middle East and North Africa

With the global economy is in its third year of deceleration amid declining inflation and oil prices, the Middle East and North Africa grew by just 1.9% in 2023, with a forecast for growth in 2024 at 2.7%. In addition to heightened uncertainty brought on by the conflict centred in Gaza, many countries in the region are also grappling with pre-existing vulnerabilities, including rising debt levels. This column summarises a new report that unpacks the nature of debt in MENA – and explains the critical importance of keeping rising debt stocks in check.