The Causes of Poverty (19): Does Better Healthcare Lead to More Poverty?

This may look like a stupid – or, more kindly, counterintuitive – question. The answer is obviously “no”. At least when we focus on the level of the individual, better healthcare seems like the best way out of poverty rather than a cause of more poverty. With better health comes better education, better and more productive work, and hence less poverty. Even a society as a whole seems better off if less of its members are unhealthy. Overall productivity and wealth increase when there is less disease. Healthy people produce more, innovate more and contribute in other ways to social wealth.

However, many people believe – wrongly in my view – that the question should be answered in the affirmative, especially when the topic is development aid. When a country drastically improves its healthcare system – thanks to development aid for instance – life expectancy rates will go up and child mortality rates will go down. This results in population growth which often outpaces GDP growth (for example because scarce development resources have been targeted at healthcare rather than GDP). GDP per capita will therefore decrease, which means increasing poverty levels and perhaps even famine.

This type of reasoning is sometimes used to justify limits on development aid in the field of healthcare. However, it’s plainly wrong. Better healthcare doesn’t lead to high population growth, and this non-existing population growth therefore cannot result in more poverty.

Now, why doesn’t better healthcare lead to population growth? With just a few exceptions, it’s the poor countries of the world that have high fertility rates, and when countries become richer, these rates drop dramatically. Poverty leads to high fertility rates for a number of reasons (see also here), but the most important one is that people tend to have more children to offset the risk of high infant mortality rates that are typical for poor countries.

Countries with high infant mortality rates also have high population growth (contrary to intuition). Some other reasons why high fertility rates are correlated with poverty:

  • More developed countries move away from agriculture and towards urban and industrialized economies, reducing the need for children as farmworkers.
  • For the same reason, women become more active in the economy, increasing the cost (in money and time) of raising children.
  • Also for the same reason, contraceptives and family planning become more common.

In this case, it seems that our initial intuitions are correct.

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2 thoughts on “The Causes of Poverty (19): Does Better Healthcare Lead to More Poverty?

  1. Thank you again for your blog. An interesting irony here is that during the same time I came across you commentary about healthcare I’d come across someone who was debating if he should save a loved one’s life or not because that would be one more life that adds to the “overpopulation” problem.

    The person even decided it would be better to support charity events that fight against non-fatal diseases (which can be quite bad themselves) rather than cancer because of the view that cancer is part of a “check” and therefore a solution.

  2. Just to be clear the person was only debating if he would help an injured or deathly ill loved one in the philosophical sense. Not in reference to someone he has already seen on a deathbed that could be helped.

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