AAE 474 Reaction paper I
Causal Effect of Health on Labor Market Outcomes: Experimental Evidence
Iron deficiency is widespread throughout the world especially in developing areas. The research, also known as WISE, on Iron status evaluation is an on-going study targeting over 10,000 individuals in Indonesia. The author with his co-workers provides new evidence on the effect of iron deficiency on economic and social prosperity of adults from data of a random assignment treatment control design intervention. Thomas addresses the experiment method and demonstrated the correlation between iron deficiency and work performance or physical health.
Thomas starts by introducing the positive association between health and economic prosperity. He starts by setting up his hypothesis that if health is counted towards human capital than it is plausible that health improvements will yield returns in labor force. He argues that by reducing iron deficiency, adult workers are able to reach a higher level of social and economical production, and they are likely to manifest themselves. Thomas goes on to elaborate more on the experiment that the experiment focuses on adults age 30 to 70; iron level is measured by hemoglobin for both males and females. After six months of supplementation, people in the experimental groups who receive treatment are showing better results than those who did not. Males who receive the treatment are more energetic, and are more able to conduct physical activities. Same outcome can be detected in females as well.
He went on to discuss the relationship between health and economic prosperity. Previous researches have shown that increases in economic resources are invested to improve diet, better sanitation and improve health, on a micro level the rise in income are directly related with lower rates of mortality and reduced nutrition deficiencies. Hence, improving nutrition level and reducing deficiency have become major roles for societies. However, in low-income families people are more likely to develop protein-energy malnutrition and iron deficiency is one of the most common deficiencies among malnutrition, it appears among male and female and all age groups. He emphasizes that evidence shows that iron status and labor market success are positively correlated in low-income settings.
In the next two sections he discussed about the detailed steps and measures in conducting the WISE experiment, and how research samples are tested and selected. Individuals participated in the research are assigned a probability weight which reflected the measurement of the effect of iron supplementation on economic and social productivity of older adults. WISE was conducted through three years and it is done through interviews and interventions. Households are randomly assigned to receive the treatment or a placebo. Results suggest that workers have IDA (Iron Deficiency Anemia) who received the supplementation shows a positive 20% raise in iron. The results show that iron supplementation increases energy efficiency and working capacity among iron deficient subjects.
Overall the article introduces and elaborates the iron deficiency problem among middle age adults specifically in developing countries. The author provides detailed information on setting up the research and rationale behind the research. Researchers also identify the possible correlations of iron deficiency and social productivity and he construct hypothesis based on malnutrition theories. He made assumptions on both micro and macro level based on social demography. And governments should establish more effective health enhancing policies, like subsidizing low income families with iron-rich food, regular health examination for low income families and workers, education on iron deficiency for families especially those ones with children, etc, to alleviate the iron deficiency.
However, at the end of his paper he does not offer his research group an effective resolution in alleviating iron deficiency in developing countries. There are several issues associated with the research: first, if the benefits of iron supplementation outweigh the costs, for example in developing countries like Indonesia, why do iron-deficient people not consume more iron-rich foods or take iron supplements? If everyone has equal access to food and supplement of iron then the productivity of middle age adult would increase, eventually will lead to increase in social production. Second, as iron deficiency is removed as a barrier to making socio-economic progress, is it possible that there are other critical nutrients that constrain people to achieve their full potential like calcium, potassium, etc? Due to the limitation of the experiment, the author did not complete any further research on variables relates to other nutrients, his conclusion can only counts partly towards decrease in social production.
Human capital is mainly determined by health condition, and iron deficiency is closely related to productivity and economic growth. Therefore, having adequate amount of iron intake would effectively prevent families, areas and countries growing into poverty trap, with effective government policies and education on iron deficiency, there is possibilities to eradicate iron deficiency locally. Good nutrition would generate better health condition, greater capacity in physical work, and economic improvements.