Economic Research Forum (ERF)

Chronic illness and the labour market in Arab countries

103
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

The impact of hosting refugees on the labour market

What are the labour market effects of a massive influx of people on members of the host community? This column examines the experience of Jordan resulting from the conflict in neighbouring Syria. Evidence shows that Jordanians living in areas with high concentrations of Syrian refugees had no worse labour market outcomes than Jordanians with less exposure to the influx.

Economies of agglomeration and firm productivity in Egypt

There is a strong body of international evidence that firms are more productive when they cluster near one another geographically. This column reports new findings on the substantial productivity benefits of such agglomeration in Egypt. The results have important implications for policy, including the value of establishing specialised industrial zones for promising business clusters with high growth potential.

Unemployment in Tunisia: why it’s so high among women and youth

Why is unemployment among women, youth and educated people so high in Tunisia? Drawing on a new ERF book – The Tunisian Labor Market in an Era of Transition – this column explores three key factors - labour supply pressures; weak demand for skilled labour; and rigidities in the core institutions of the labour market – as well as potential policy responses

Lebanon’s austerity budget of 2019: a last resort to avoid crisis?

Lebanon’s high and rising public debt has become unsustainable. This column explains why it is essential that the austerity measures in the draft budget of 2019 are approved in order to avert imminent debt and exchange rate crises.

Return migration and income mobility in MENA

The emigration and return migration of working-age men in the Middle East and North Africa have significant effects on national economies. This column summarises new evidence on the contribution of moving to another country for work and later returning home to the lifetime earnings and intergenerational socio-economic mobility of workers in Egypt, Jordan and Tunisia.

Falling rents should make way for institutional reforms in Arab states

Can the development prospects of the Arab countries be separated from the natural resource endowments that have been shaping their economies for so long? This column outlines the likely downward trajectories of per capita natural resource rents to 2030 – and the sense of urgency that those numbers should bring to discussions of the need for institutional reform.

Why reforms in the Middle East are unavoidable

One striking feature of the recent economic history of the Middle East is high-income Gulf economies financing the persistent external imbalances of its geo-strategically important neighbours. This column asks what happens when, as a consequence of the technological disruptions of the global fossil fuel market, the current account deficits of key countries in the region are no longer sustainable.

Unemployment in Tunisia: why it’s so high among women and youth

Why is unemployment among women, youth and educated people so high in Tunisia? Drawing on a new ERF book – The Tunisian Labor Market in an Era of Transition – this column explores three key factors - labour supply pressures; weak demand for skilled labour; and rigidities in the core institutions of the labour market – as well as potential policy responses.

France’s headscarf ban: the effects on Muslim integration in the West

What is the effect of religious bans on the economic and social integration of Muslim minorities in Western countries? This column reports evidence on the effects of France’s 2004 legislation banning conspicuous religious symbols in schools, which particularly affected the headscarves worn by Muslim women. There has been a damaging impact on the educational attainment and later life outcomes of young Muslim women affected by the ban.

Women, work and social norms in Saudi Arabia

Employment rates for women in Saudi Arabia are very low. By custom, they cannot decide for themselves whether to work or not – they need the consent of their male guardian (either their husband or father). Whether men permit their wives or daughters to work depends crucially on social norms. This UBS Center column reports evidence that most Saudi men privately believe that women should be allowed to work, but that they underestimate the extent to which other men share their views.