Long Life and Productivity in South Africa: Long Burdensome or Long Healthy?

This paper investigates the relationship between health and productivity in South Africa. It tests for unit roots and structural breaks and uses the outcome to perform causality and simultaneous equations estimations. The results suggest that without structural breaks, the effect of health on productivity is downplayed. They highlight how long people live does not matter for productivity, the improvements in their lifespan does. Long life can improve productivity only if it is a healthy long life. The impact of improvements of levels of health on productivity is less than 25 per cent of that of improvement of growth rates of health. Improvements in both the levels and growth of male life expectancy enhance productivity more than those of females; an increase in productivity increases the levels of female life expectancy more than those for males. HIV/AIDS significantly reduces levels of life expectancy (with greater impact on females) and labour productivity. Overall, macroeconomic policy for health and growth cannot be conceived separately. Efforts to fight against HIV/AIDS can improve life expectancy and productivity, leading to higher growth. Females may be more vulnerable to die of HIV/AIDS related diseases than males are. Anti-AIDS programmes can have biased effects in favour of female health, although in itself this may not be enough to bring about gender-balanced improvements in health.