Thursday, March 10, 2011

Health and economic growth in India

Here's a quick summary of a study suggesting that gains in economic growth did not result in gains in child nutrition.

Why might this be the case?


  1. The interesting thing about this article is that even though GDP growth didn't have an effect, the rates of underweight children and stunting did come down. So health is slowing improving, but why?

    I'd also be interested in the effect of urbanization here. India's GDP is increasing yes, but the cities are increasing rapidly as well, with a large slum population. In India there are more cell phones than there are tiolets. This overcrowding maybe holding back major improvements in health.

    I went to India in december and noticed that it was pretty unequal. Perhaps if India's gini coefficent decreased than GDP growth might benefit health...?

  2. Sara, Good point. I'm not sure if urbanization/crowding was a control variable or was examined in any way.

  3. I think that the study was too short. Looking at China on Gapminder GDP/capita vs life expectancy, there was a lag of almost 30 years of consistent improvement in GDP/capita, but no improvement in life expectancy. I do not necessarily think that comparing China's growth to India's is a good idea in general because China has had some funky stuff go on in their history, but no other population in the world is close to touching India or China. Maybe there is a lag effect from GDP/capita to health, and maybe this is exaggerated in countries with extreme population sizes. Maybe in a few years or even a decade or two, this study could be completed with different results???

  4. Kevin I like your broad chronological view of the development of an economy where there is a large population. Upon thinking about it more, I wondered if this large population could lead to a disproportionate dependency ratio for these countries. This dependency ratio would reduce education, savings and participation in the labor force. However, empirical evidence seems to suggest that this effect would fade?? with time as the Chinese labor force expanded. Perhaps the education of women and their involvement in productivity has led to growth. India however has invested strongly in human capital and has many educated college graduates.

  5. On the front page of this morning's Wall Street Journal is an article titled "In India, Doubts Gather Over Rising Giant's Course." This is a brand new article that attempts to answer more questions about India's unusual economic boom and is a very helpful read to review for Thursday's exam.

    [Author: Paul Beckett, Wall Street Journal, March 30, 2011]

    The article includes many facts and statements from India's officials and how its government is responding to this enormous problem - you can definitely tell they are attempting to undermine the issue... Microsoft's former Indian chairmain, Ravi Venkatesan, states that "about 400 million people have seen benefits, and 800 million haven't."

    According to the statistics, India has been undergoing a process of urbanization since 1991 as the graphs in the article highlight the successive annual increases in GDP. However, this urbanization has heightened the inequality gap in India as the wealthy elite amass fortunes while the hundreds of millions of the impoverished urban individuals must face the "rising prices, a byproduct of the high growth rate."

    Several other causes for this inequality are detailed throughout the article (i.e. lack of privatization of public-sector companies, maintained reliance on agriculture, malnutrition, public-education system disorganized).

    Amongst the statistics revealed within the article, it is crucial to note that the average calorie consumption by the poorer half of the nation has been declining since 1987 (24 years of decline - greatly factors into why millions are malnourished.

    The last interesting fact from the article I came across includes an Indian economist who states that the black economy within India during the mid-1950s accounted for about 5% of India's GDP... in 1996 he estimates this number to have reached approximately 40% and by 2006 the black market accounted for HALF of India's gross domestic product. Considering the size of India... the mere thought that half of their transactions and investments are happening "under the table" honestly makes me feel uncomfortable from an investor's standpoint as well as an individual in a global economy. This fact alone revealed by an actual economist from India opens new sets of questions that could help to accurately target the factors that are driving this inequality.