Determinants of Health and Education Outcomes

Background Note for World Development Report 2004:

Making Services Work for Poor People

Deon Filmer
The World Bank

May 2003

The findings, interpretations, and conclusions expressed in this paper are entirely those of the
authors. They do not necessarily represent the views of the World Bank, its Executive Directors,
or the countries they represent.

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Demand and supply interact to determine health and education outcomes

Health and education outcomes are determined by more than the availability and quality of
health care and schooling. Better nutrition helps children learn. Better refrigeration and
transport networks help keep medicines safe. Many factors determine outcomes on both the
demand and the supply side, linked at many levels. The demand for health and education is
determined by individuals and households weighing the benefits and costs of their choices and
the constraints they face. The supply of services that affect health and education outcomes starts
with global technological knowledge and goes all the way to whether teachers report for work
and communities maintain water pumps (figure 1).
Figure 1 The determinants of demand and supply operate through many channels

Policies,
capacity,
technical
know-how,
politics

Health, nutrition, water

education sectors

Households and
individuals

- Service price, accessibility, and quality

- Financing arrangements

Behaviors and
actions

Related sectors

Health: preventive
care, care seeking for
illness, feeding
practices, sanitary
practices,

Global knowledge
National macro-,
sector-, and microlevel policies
Technical
capacity to
implement policies
Governance;
politics and
patronage;
political capacity
and incentives to
implement policies

- Availability, prices, and accessibility of:

food, energy, roads,
- Infrastructure
- Environment

Education: enrollment
and school
participation, learning
outside of school,

Local context

Outcomes

Child
mortality
Child
nutrition
School
completion /
Learning
achievement

Constraints
-Income
-Wealth
-Education and
knowledge

- Local government and politics

- Community institutions
- Cultural norms (including exclusion:
gender, ethnic,)
- Social capital

Supply

Demand

Demand: individuals and households

Benefits and costs determine how much an individual invests in education or health. What are
the benefits? Higher levels of education and health are associated with higher productivityand
higher earnings. Investing in human capital is a way to get those returns. But the returns might
differ for different people, such as lower expected earnings for women or for ethnic minorities.
In these cases one would expect different levels of investment: different desired levels of
schooling, for instance. A crucial element of demand is the degree to which individuals rather

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than society reap the rewards. Goods with large positive externalitiesin the extreme, public
goodswill be demanded at less than the socially optimal level.
What are the costs? There are direct costs: user fees, transport costs, textbook fees, drug costs.
Some of these can be borne by familiesthough not all families. Coping mechanisms for those
that cannot are often hard to use. For example, the lack of insurance markets can make it hard to
absorb the financial burden of sudden illness. Or the inability to borrow against future earnings
can make it hard to get credit for schooling investments.
Indirect costs can also be large. For example, children often contribute to household income by
working inside or outside the home (looking after siblings, working on the family farm). The
value of this contribution is forgone if they spend substantial time in school.
The total cost of illness includes days of work lost recovering, seeking care, or looking after the
ill. Richer families can cope better with these costs, leading to a direct association between
income and outcomes. In addition, better health and education are often valued in themselves.
As incomes increase families demand more of them, again resulting in an association between
income and outcomes.
The production of health and education depends on the knowledge and practices of adults in
households. This works through both the demand for human capital and the generation of
outcomes. A review of four hygiene interventions in poor countries that targeted hand-washing
found 35 percent less diarrhea-related illness among children who received the interventions.1
And factors in the home complement schooling: books and reading at home contribute to
literacy.
Investments in the human capital of children are sensitive to the allocation of power within
households: families in which the bargaining power of women is stronger tend to invest more in
health and education. A study in Brazil found that demand for calories and protein was up to 10
times more responsive to womens than mens income.2 This result, strongest in societies that
proscribe womans roles, tends to affect girls more than boys.3
More generally, the roles and responsibilities of different household members can affect how
investments are made. A woman in Egypt says: We face a calamity when my husband falls ill.
Our life comes to a halt until he recovers.4 Her husbands earnings are crucial for sustaining the
family. Since productivity is related to illness, households respond. In Bangladesh a study
found that household members who engaged in more strenuous activities received more
nutritious food.5 Daughters education might be less valuable to parents if sons look after them
in old-age, so parents might be less willing to send girls to school.6
1

Based on interventions in Burma, Bangladesh, India, and Indonesia (Huttley, Morris, and Pisani (1997)).
Thomas (1997).
3
See Quisumbing and Mallucio (2000).
4
World Health Organization and World Bank (2002).
5
Pitt, Rosenzweig, and Hassan (1990).
6
Reviews of the theory and empirical issues related to household decision making and demand are in Strauss and
Thomas (1995) and Strauss, Mwabu, and Beegle (2000).
2

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Demand: links between sectors at individual and household levels

Health and nutritional status directly affects a childs probability of school enrollment and
capacity to learn and succeed in school. Malnutrition among children was associated with
significant delays in school enrollment in Ghana.7 Improving child health and nutrition at the
pre-primary level has long-term impacts on development. A study in the Philippines found that a
one-standard-deviation increase in early-age child health increased subsequent test scores by
about a third of a standard deviation.8
Improving the health and nutritional status of students positively affects school enrollment and
attendance. A longitudinal study in Pakistan found that a one-third of a standard deviation
increase in child height increased school enrollment by 19 percentage points for girls and 4
percentage points for boys.9 An evaluation of school-based mass treatment for deworming in
rural Kenya found that student absenteeism fell by a quarterbut test scores did not appear to be
affected.10 Improving nutrition is not as simple as supplementary feeding at school: households
can reallocate resources with the effect of sharing that food. A study in the Philippines found
no such sharing in general, but for a school snack program there was sharing in poorer
families.11
Parents education has intergenerational effects on the health, nutritional status, and schooling of
their children. Adult female education is one of the most robust correlates of child mortality in
cross-national studies, even controlling for national income. Similarly, mothers education is a
strong determinant of lower mortality at the household level, though the relationship weakens
when other household and community socioeconomic characteristics are controlled for.12 A
large part of this effect might not be general education but specific health knowledge, perhaps
acquired using literacy and numeracy skills learned in school, as a study in Morocco found.13
The effects can also be interspatial: a study in Peru found that the education of a mothers
neighbors significantly increases the nutritional status of her children.14 Parents education is
similarly associated with the schooling of their children, though the magnitude of the effectand
the relative roles of mothers and fathers educationvary substantially across countries.15
Access toand use ofsafe water, as well as adequate sanitation, have direct effects on health
status. Hand-washing is a powerful health practice, but it requires sufficient quantities of water.
An eight-country study found that going from no improved water to optimal water was
associated with a 6 percentage point reduction in the prevalence of diarrhea in children under
three years old (from a base of 25 percent) in households without sanitation. Nutritional status

Glewwe and Jacoby (1995).

Glewwe and King (2001).
9
Alderman and others (2001).
10
Miguel and Kremer (2001).
11
Jacoby (2002).
12
Desai and Alva (1998); Bonilla-Chacin and Hammer (2000).
13
Glewwe (1999).
14
Alderman, Hentschel, and Sabates (2001).
15
For examples in Conakry, Guinea, see Glick and Sahn (2000); in rural China see Brown and Park, forthcoming.;
for a multi-country comparison see Filmer (2000).
8

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was likewise associated with access to improved water.16 But not all studies find strong
associations between water source and better health.17
The water source is only part of the story: in Bangladesh water accessed through tubewellsan
improved source is frequently contaminated with arsenic. One study found that arsenic
levels higher than the World Health Organizations maximum acceptable level are associated
with twice the level of diarrhea in children under 6. Extremely high levels of arsenic are
associated with shorter stature among adolescents.18
The same eight-country study mentioned above found that going to optimal sanitation from
none was associated with a 10 percentage point drop in recent diarrhea in households with no
improved water source.19 As in education, there are spillover effects: sanitation practices at the
community level impact everyones health.20 In Peru the sanitation investments of a familys
neighbors were associated with better nutritional status for that households children.21
The use of safe energy sources affects both health and education. Indoor air pollutionfrom
using dirty cooking and heating fuelshurts child health. One review of studies found that the
probability of respiratory illness, or even death, was between two and five times higher in houses
where exposure to indoor air pollution was high.22 A study in Guatemala found birthweights 65
grams lower among newborns of women who used wood as a domestic cooking fuel.23 Coping
with the cold, in cold climates, affects health and imposes substantial direct and indirect costs on
households.24 Education is affected as well: schools have to close when there is not enough heat,
and it is hard to imagine that working on schoolwork at home is an option when indoor
temperatures are below freezing.
Supply: global developments
At any given income, health and education outcomes have been improving (figure 2). The
difference between 1990 and 2000, continuing a trend that goes back several decades, is
interpreted as advances in technologies and leaps in knowledge about health and hygiene.25
Predicted levels of child mortality declined more at higher incomes, although some debate this
finding.26 The changes are large, even among poorer countries. At a national income of $600
16

The model includes indicators of household assets, number of siblings, characteristics of parents (including
education), as well as child age and country dummy variables. The countries are Burundi, Ghana, Guatemala,
Morocco, Sri Lanka, Togo, and Uganda (Esrey (1996)).
17
Alderman, Hentschel, and Sabates (2001); Lee, Rosenzweig, and Pitt (1997).
18
Hallman, background note for the WDR 2004.
19
The model includes indicators of household assets, number of siblings, characteristics of parents (including
education), as well as child age and country dummy variables. The countries are Burundi, Ghana, Guatemala,
Morocco, Sri Lanka, Togo, and Uganda (Esrey (1996)).
20
Hughes, Lvovsky, and Dunleavy (2000).
21
Alderman, Hentschel, and Sabates (2001).
22
Bruce, Perez-Padilla, and Albalak (2000); also see discussion in Hughes, Lvovsky, and Dunleavy (2000).
23
After taking into account confounding socio-economic factors although the authors admit that this is perhaps
imperfect (Boy, Bruce, and Delgado (2002)).
24
World Bank (2002).
25
Preston (1980).
26
Hill and Pebley (1989).

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per capita, the predicted child mortality fell from 100 per 1,000 births to 80a full 20 percent
reductionbetween 1990 and 2000. If this association were sustained, major headway would be
made toward the Millennium Development Goal through these changes alone. Major
breakthroughs in immunizations for malariaor even HIVcould have a huge impact on
mortality at any given level of income.
Recent years have seen major developments in global funding for health and education
expenditures. Debt relief through the Heavily Indebted Poor Countries initiative is tied to
increases in expenditures on these sectors. New assistance, delivered through multisectoral
products, such as Poverty Reduction Support Credits, requires explicit strategies for human
development investments. Global funds for health and the Fast-Track Initiative for education
are international pledges to support initiatives in the sectors.27 Easing financial constraints goes
hand-in-hand with using resources effectively to support services that work for poor people.
Figure 2 Mortality at a given level of national income has been declining
Changes over time in the association between GDP per capita and child mortality
6

Under-5 mortality (per 1000 log)

1990
2

2000

1
4

10

11

GDP per capita (1995 US$ log)

Sources: GDP per capita data from World Development Indicators database. Under-5 Mortality from Unicef
(2002).
Note: Lines show outcome as predicted by a non-linear function of GDP per capita.

Supply: national resources`

National income is strongly associated with child mortality and primary school completion.
Income and health and education outcomes build off of each other. More income leads to better
human development outcomes, and better health and education can lead to increased productivity
and better incomes. Studies that have tried to disentangle these relationships typically find
income to be a robust and strong determinant of outcomes.

27

See Chapter 11.

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National endowments are also a strong determinant. Geography and climate sometimes make it
tougher to overcome health problems. For example, areas conducive to mosquito survival have
great difficulty in combating malariaand widely dispersed populations are difficult to serve
through traditional school systems.
The performance of public expenditure in producing outcomes varies substantially across
countries. There are large differences in achievements at similar levels of expenditure and
similar achievements with very large differences in expendituresconditional on income.
Spending more through the public sector is not always associated with improved outcomes. This
is not to say that spending cannot be helpfulbut the way resources are used is crucial to their
effectiveness.
Supply: political, economic, and policy context
Governance affects the efficiency of expenditures: in corrupt settings money that is ostensibly
earmarked for improving human development outcomes is diverted. Staffs ostensibly delivering
services do not. But the effects of poor governance can be deeper. Famines are caused as much
by human factors as by nature.28 And the repercussions run across national borders. For
example, a drought combined with misguided policies and bad governance in Zimbabwe resulted
in a regional food shortage.
Managing public expenditures can be a critical link in ensuring that allocated expenditures get
put to uses that improve outcomes. Cash budgeting in Zambia led to unpredictable social
service spending and deep cuts in spending on rural infrastructure.29
Conflict leaves long-lived scars on health and education. Children in wartorn countries are hard
to find, hard to get into school, and hard to keep in school. During Sierra Leones recent civil
war, tens of thousands of children attended primary school but hundreds of thousands did not.30
Wars, including civil wars, lead to lost generations of undernourished and undereducated
children. These deficiencies are difficultif not impossibleto make up for. Out of school for
a long time, it is hard to return. And bad health and poor nutrition at an early age affects children
throughout their lives.
Periods of national economic and social crisis can result in bad health and education outcomes.
This is clear in Russias recent history: adult mortality has increased dramatically over the past
10 years. Sustained economic depression can severely compromise childrens health, with
cascading effects on subsequent development and learning. The evidence of shorter term
economic crises is more mixed. In middle-income environments school enrollments might
increase as the opportunity cost of time of young people falls.31 Even in Indonesia, a relatively
poor country, the deep economic and social crisis of the late 1990s had smaller impacts on
outcomes than initially feared. This was partly because broad social safety nets were rapidly put
in place.
28

For discussions see Sen (1981) and Ravallion (1996).

Dinh, Adugna, and Myers (2002).
30
Sommers (2002).
31
Schady (2002).
29

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Supply: the local context of government and communities

Decentralization can be a powerful tool for moving decisionmaking closer to those affected by it.
Doing so can strengthen the links and accountability between policymakers and citizenslocal
governments are potentially more accountable to local demands. It can also strengthen them
between policymakers and providerslocal governments are potentially more able to monitor
providers. But local governments should not be romanticized. Like national governments they
are vulnerable to captureand this might be easier for local elites on a local scale.32
Community-level institutions, shaped by cultural norms and practices, can facilitate or hinder an
environment for improving in outcomes. A review of safe-water projects in Central Java,
Indonesia, associates success with greater social capital.33 In Rajasthan, India, manifestations of
mutually beneficial collective action were associated with watershed conservation and
development activities more generally.34 A broader review of the literature suggests that
participatory approaches to implementing projects are more successful in communities with less
economic inequality and less social and ethnic heterogeneity.35
Supply: services and their financing
Services themselves are important. Inaccessible or poor quality services raise the effective price
of health care and schooling, which results in higher mortality and lower educational
achievement. Bad quality schools deter enrollment and reduce attainment and achievement,
especially among children of poor families. Health clinics where the technical skills of staff are
so bad as to be dangerous will lead to higher mortality. Lack of water will significantly hurt
child health.
Financing arrangements matter. Absorbing the burden of unpredictable large expenditures
through health insurance can reduce impoverishment, which in turn will affect outcomes.
Financing primary schooling might seem relatively minor: direct costs are typically small. Even
so, a lack of access to credit has been found to be associated with lower school enrollment.36
Borrowing to pay the direct costs of primary school is almost unheard of, but there could be
second-round effects if the lack of access to credit means that families need children to engage in
home production.
Supply: services working together to produce outcomes
Links among services are critical. Vaccines can become less effective, ineffective, or even
dangerous if they get too hot, freeze, or are exposed to light. The ability to transport and store
vaccines properly thus determines the success of immunization campaigns. In cold climates
schools and health facilities often need to close because of the lack of heating, and dependable
energy sources can directly affect health and education outcomes. The accessibility of services
32

Bardhan and Mookherjee (2002).

Isham and Kahkonen (2002).
34
Krishna and Uphoff (2002).
35
Mansuri and Rao (2003).
36
For example see Jacoby (1994) and Rose (2000).
33

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can be a deterrent to their use: roads and adequate transport contribute to the total cost of using a
service. Since the expected return to education determines the benefits of schooling, labor
markets that are not fundamentally distorted (for example, through discriminatory practices
toward marginalized groups) can contribute to higher education achievement.

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