Impact of Health on Labour Productivity: Empirical Evidence from Pakistan

Abstract

Health status has been given wide spread weight age across many Sustainable Development Goals. This study would reinforce its significance by quantifying the impact of health status on workers’ productivity in Pakistan. The current study attempts to examine the role of health status on workers’ productivity by employing Auto Regressive Distributed Lag (ARDL) approach by Pesaran and Shin (1999) and Pesaran et al. (2001) using data from 1980 to 2010 for Pakistan. It has been found that 1% improvement in health status would result in around 13.39% rise in worker productivity. The coefficient of education is positively related to worker productivity at 1% level of significance and indicates that worker productivity will increase by 0.18% due 1% increase in education. Inflation has negative relationship with worker productivity whereas the association between worker productivity and Foreign Direct Investment, being proxy of technology transfer, is positive but statistically insignificant which shows that technology transfer has no effect on productivity in case of Pakistan. Education and experience have often been observed as determinants of worker productivity in empirical analysis of Pakistan. However, this study is a first endeavor to quantify the impact of health status upon worker’s productivity for Pakistan.