Health care in Jamaica: quality, outcomes, and labor supply

ABSTRACT

This paper investigates the relationship among labor force participation, health outcomes, and the availability and quality of health care in a developing country. We develop an econometric model that addresses the demand for health care in a choice model and then link it to health status outcomes and labor force participation decisions. The econometric model has two parts to it. First, we estimate a discrete choice model to determine how ill people choose among the various providers of health care. Using the parameter estimates from this model, we calculate the expected value of the best available to each individual. In the second stage, health is allowed to affect labor force participation in a simultaneous equations probit model where the potential endogeneity of reported health is controlled for with a set of instruments that includes the constructed health care quality. We report the results of simulating the impact on health outcomes and labor force participation of policy changes such as improving access to and quality of health care as well as reducing the price of health services. We use data from the 1989 Jamaican Survey of Living Conditions, the 1989 Jamaican Labour Force Survey, and a sample (also from 1989) of Jamaican health care facilities. We find that the quality of health facilities has a small improving effect on health but no significant effect on labor force participation (AU)