Health, gender division of labor, and productivity

This paper examines the role of health in determining aggregate productivity through its impact on the gender division of labor across sectors. A two-sector general equilibrium model is developed featuring a relatively high return to health for men in agriculture, implying a reallocation of female talent toward nonagriculture when health of the general population is improved. Quantitative analysis shows that health improvements effectively increase gender-based sectoral allocation efficiency and raise aggregate labor productivity. Around 20% of the productivity gains from health improvements are accounted for by the gender division of labor. Moreover, health subsidies are generally more effective than education subsidies in enhancing aggregate output and welfare.