What are the economic consequences of adult ill- health in Russia? Marc Suhrcke WHO European Office for Investment for Health and Development (Venice)

Sustainable economic growth without health in Russia? Source: World Bank WDI 2005; WHO/EURO HFA database 2005

Relevant channels from health to the economy: a simple framework ECONOMY HEALTH Labour productivity Labour supply Education Saving

Assessing the economic consequences of adult ill-health A) Past and current impact of adult ill-health on economic outcomes B) Projected macroeconomic benefits of improving adult health

Annual days of absence due to illness per employee: Russia vs. EU15 Source: calculations based on RLMS rounds ; EU-15 value is from ESWLC 2000

Costs of absenteeism due to illness in Russia Source: Suhrcke/Rocco/McKee et al (2005), calculations based on RLMS absenteeism data 2003 Total wage loss (US$ billion) Total wage loss as share in GDP 0.71% Total production (GDP) loss (US$ billion) Total production loss as share in GDP 1.31%

The impact of ill health on labour productivity and supply Self-reported good health increases the wage rates by 22% for women and by 18% for men, compared to those who were not in good health A workday missed due to illness reduces the wage rate by 5.5% for females and 3.7% for males An ‘average’ Russian male aged 55 would be expected to retire at 59. With chronic illness he retires at 57.

The impact of chronic illness on early retirement Probability of retiring in subsequent period for average male individual: Source: Panel logit regression as described in Suhrcke/Rocco/McKee et al RichestPoorest

The death of a household member affects other household members’ welfare: - alcohol consumption up by 10 grams per day Chronic illness affects household incomes: -probability of suffering depression up by more than 50% - annual loss of 5.6% of per capita income ( ) High alcohol consumption significantly increases the probability of job loss.

Projecting the impact of 3 future adult mortality scenarios on economic growth

Predicted GDP per capita (US$) based (conservative estimate): Source: Suhrcke/Rocco/McKee et al 2005

Difference in projected GDP per capita between scenario 1 (‘status quo’) and scenario 3 (‘reach EU15’) Conservative estimate (see graph) Less conservative estimate 2005$ 105$ $ 2,856$ 9,243 Source: Suhrcke/Rocco/McKee et al 2005

Sustainable economic growth without health in Russia? Source: World Bank WDI 2005; WHO/EURO HFA database 2005