NORTH-WEST UNIVERSITY
MAFIKENG CAMPUS
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060038793-North-West Umversity Mafikeng Campus Library
THE IMPACT OF HEALTH AND EDUCATION ON LABOUR FORCE
PARTICIPATION: THE CASE OF BOTSWANA (1982-200
7)
BY
TSHEGOFATSO BASUTI
(STUDENT NUMBER: 23049219)
DISSERTATION SUBMITTED IN
FULFILMENT OF THE
REQUIREMENTS FOR THE
DEGREE OF MASTER OF
COMMERCE IN ECONOMICS
Supervisor: Dr. Mike Sikwila, Department of Economics, North-West University, Mafikeng (Republic of South Africa).
External Supervisor: Prof. Narain P. Sinha, Department of Economics, University of Botswana, Gaborone (Botswana).
MARCH 2012
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-ACKNOWLEDGEMENT
I acknowledge all those who have contributed in one way or another towards the successful completion of my dissertation. My sincere gratitude goes out to my External Supervisor -Prof. Narain P. Sinha (University of Botswana) and my Internal Supervisor- Dr. M. Sikwila for their guidance and fruitful comments. They. made it possible for tbis dissertation to be completed.
I am also grateful to the staff of the Department of Economics at the North-West University for. providing logistical support in the course of the research that culminated in tbis dissertation. I also want to extend special word of thanks to my friend Afric Njoku, for shedding light on statistical analysis tools and data analysis
Finally, I thank the Almighty God for giving me courage and hope that enabled me to complete my research and Masters degree.
DEDICATION
I dedicate my work to Almighty God who helped me to complete this work and has given me the hope to go on without any fear of failure. This work is also dedicated to my brothers, sisters and my extended family. Without their encouragement, the studies and research leading to this dissertation would not have been accomplished. Last but not least, I dedicate this work to the Government of Botswana for granting me the opportunity to further my studies and enhance my intellect.
DECLARATION
This disset1ation bears the author's original work. Unless otherwise, complementary referenced material is indicated. Copyrights are reserved for the author, and therefore. this dissertation cannot be presented at any other institution as original work of another author.
Author's Signature
APPROVAL
The undersigned
approve
that they have read and recommend
for
acceptance by
th
e North-West'
University
the dissertati
on entitl
ed
:
THE
IMPACT OF
HEALTH AND EDUCATION ON
LABOUR FORCE
PARTICIPATION
: TH
E CASE OF
BOTSWANA
(1982-
2007)
In
fulfilment
of the requirements
for the
award of
the
degree of
MASTER
OF COMMERCE IN ECONOMICS
.
External
Supervisor:
Prof
.
Narain P.
Sinha
Department of Economics
University of
Botswana
,
Gaborone (Botswana
).
Internal Supervisor:
Department of
Economics
North-West Univers
ity
,
Mafikeng
Campus
Mafikeng
, (Republic of South Africa
)
ABSTRACT
The current study assesses the impact of health and education on labour force participation in Botswana using time series data from 1982-2007. To achieve this, stationary test; Johansson Co integration test and multi-collinearity test were conducted before using a dynamic ordinary feast square estimation.
There are three labour force participation estimates each ·with four d[fferent models. These include.· male, female and total labour force participation rate. The .findings were as follows: firstly, an increase of primary school enrolment reduces female participation in the labour force but increases the male participation rate. This increase in male participation rate could be as a result of size of male participants in the labour force or because of their role in the family, especially in the African settings. Secondly, an increase in contemporaneous education expenditure increases both female labour force participation and the total labour force participation rate but reduces their participation in the short-run. Thirdly, the study also shows that an increase in contemporaneous health expenditure increases male participation rate and reduces male participation rate in the long-run while overall labour force participation rate increases in the long-run.
Finally. given the importance of health and education on labour force participation rate in Botswana, the study asserts that it is of paramount importance for government to incorporate strategies that encourage citizens to recognise the need to maintain good health and education. In absence of such interventions, Bofswana might find it difficult to achieve most of her vision 2016 and MDG 's goals.
TABLE OF CONTENTS Acknowledgement. ... i Dedication ... ii Declaration ... iii Approval. ... iv Abstract. ... v Table of Contents ... vi List of Figures ... x List of Tables ... xi
List of Acronyms ... xii
1. CHAPTER 1: INTRODUCTION 1.0 Background ofthe Study ... ! 1 .1 Statement of the problem ... 5
1.2 Justification of the study ... 6
1.3 The Objective of the study ... 6
1.4 Research hypotheses ... 7
2. CHAPTER 2: OVERVIEW OF BOTSWANA'S ECONOMY
2.0 Introduction ... 8
2.1 Economic Performance ... 8
2.2 Governance ... 1 0 2.3 Employment ... ! 0
2.4 Labour Market Policies ... 12 2.5 Education ... 13
2.6 Health ... 16
2.7 Conclusion ... 19
3. CHAPTER 3 LITERATURE REVIEW 3.0 Introduction ... 20
3.1 Review of Theoretical Literature ... 20
3.2 Review of Empirical Studies ... 21
3.2.1 Education and Labour Force Participation ... 22
3.2.2 Ilealth and Labour Force Participation ... 26
4. CHAPTER 4:METHODOLOGY
4.0 introduction ... 32
4.1 Model Specification ... 32
4.2 Types and Data ource ... .35
4
.3
Techniques of Data Analysis ... 354.3.1 Unit Root Analysis ... .35
4.3.2 Cointegration Tcst. ... 37
4.3.3 Dynamic Ordinary Least Square Model. ... .37
5. CHAPTER 5: EMPIRICAL RESULTS AND INTEPRETATION 5.0 Introduction ... .38
5.1 Descriptive Summary Statistics ... 38
5.2 Unit Root l"est Results ... 40
5.3 Johansen Cointegration Results ... .41
5.4 Correlation Matrix output ... 43
5.5 Empirical Dynamic Ordinary Least Square (DOLS) ResuJts and Discussions ... .44
6. CHAPTER 6: UMMARY, CONCLUSION AND RECOMMENDATION 6.0 Introduction ... 50
6.1 Summary ... 50
6.2 Conclusion ... 51
6.3 Policy Recotntnendations ... 52
6.4 Limitations of the Study and Fut1her Research ... 53
References ... 54
Appendix
Tabular Survey - Empirical Evidence on Related Studies on Education, Health and Labour Force Participation.
LIST OF F
IGURES
Page Figure I: Labour Force Participation and Labour Force Total(% ofTotal
population) ... t
Figure 2: Health Related Expenditure ... 2
Figure 3: School Enrolment (1995-2007) ... .4
Figure 4: Labour Force Participation Rate and Population Ages 15-64 ( 1980-2007) ... 11
LI
S
T OF
AC
RO
N
YM
S
BFTU: Botswana Federation ofTrade Unions
BHC: Botswana llealth Care
BOTUSA: Botswana and United States of America
CSO: Central Statistics Office
DOLS: Dynamic Ordinary Least Square
GOP: Gross Domestic Product
GFATM: Global Fund to Fight Aids, Tuberculosis and Malaria
HIV/AIDS: !Iuman Immunodeficiency Virus/Acquired Immune Deficiency Syndrome
llCA: Japan International Cooperation Agency
MDG's: Millennium Development Goals
MLG: Ministry of Local Government
NACA: National Aids Coordinating Agency
NEMIC: National Employment, Manpower and Income Council
PHC: Primary llealth Care
P: Pula (Botswana currency)
UNDP: United ations Development Programme
UNFPA: United ations Population Fund
UNICEF: United Nations Children's Fund
WHO: World Health Organization
CHAPTER ONE
INTRODUCTION
1.0 Background to the Study
The Republic of Botswana's Vision 2016 goals related to health and education are
consistent with Millennium Development Goals (MOO's). The achievement of these goals will automatically translate into sustainable economic growth which will be
evidenced by an effective labor force participation in Botswana. In economics, a labor
force includes both the employed and unemployed. In general, the labor force of a country consists of everyone of working age 15-64 years of age who are actively participating in
the labor force, that is, people actively employed or seeking employment. People that are
not counted include; students, retired people, stay-at-home parents, people in prisons or similar institutions, people employed in jobs or professions with unreported income, as
well as discouraged workers (Persons wbo are currently unemployed who have not taken
active steps to find work in the last 30 days).
Figure l: Labor Force Participation and Labor Force Total (% of Total Population)
- Labor rorce participation rate, total(% or total population ages 15·6-')
Figure 1 shows that Botswana total labor force population has been consistently growing over the years but its growth is lower than that of population ages 15-64 of years and as well as participation rate of labor force. Figure 1 also shows that the labor force participation rate grows more than the population of between the ages of 15-64 for years 1995 to 1998 after which it starts decreasing. The total labor force has grown over the period of the study, which is an evidence of growing economy. Further, the figure shows that after 1998, a negative relationship exists between the labor force participation rate and total labour force.
It is also true that health is an important form of human capital. lt can enhance worker productivity and their participation in the labour force by raising physical capacities such as strength and endurance, as well as mental capacities like cognitive functioning and reasoning ability. We expect to see a positive relationship between health and productivity for both unskilled and skilled workers. As Botswana's vision 2016 objective states: "A compassionate, just and caring Nation", the government of Botswana has seen a need that health and labor force participation are positively related. This relationship is based on the saying that "a healthy nation is a prosperous one•·.
Fi re 2: Health Related Ex enditure in Botswana
J
..
~~---t
--
~=:__-~~~
~~~~
21.1 1---~-~~~
ource: World Bank Database for Various Years (Year)
- llallt!Lf!4.la4fiiiJic(%flltoDI . . . 'C) QeeiCil~tUik(%fJl ---eat~) . . _ . . . . .. . . e,palllt(" fl GDP) . _ . . . , _ . ... , ... (%ofGDP)
Figure 2 shows that the government of Botswana has consistently been working towards
achieving its Vision 2016 objective's three (a compassionate, just and caring nation) which is evident in figure 2. The heath expenditure by government has been above 50
percent of its total health expenditure and has consistently been growing, although it fluctuated sometimes, for example, between 2002 and 2003. External resources for health which might be in form of grants and subsidies have been growing from below I 0 percent
of total expenditure on health in 1995 to close to 18 percent of total expenditure on health in 2009. Out-of-pocket health expenditure by individuals was close to 38 percent of
private expenditure on health in 1995 and was approximately 30 percent of private
expenditure on health in 2002 and is gradually growing over the years, but total expenditure by private individuals has been declining over the years, from approximately 48 percent in 1995 to 20 percent in 2009. This decline in the private expenditure on health is an evidence of government participation in the providing an efficient medical facilities
in Botswana.
The relationship between health and labor force participation is positively related because health limitations reduce labor productivity and lead to reduced participation by those
with poor health (not just older men), health problems impose a cost on the economy in terms of production loss (Haveman and Salkever, 1984). An indication that this may be a
relevant problem is the increase in the number of people who receive a social security payment associated with being disabled. A better understanding of the relationship between health and labour market outcomes is necessary in any attempt to understand the impact of health limitations to the economy via its effect on labor force participation (Chirikos, 1986 and 1993; Haveman and Salkever, 1984).
The:: Botswana government has been pursuing its Vision 2016 since independence in 1966. The government believes that an educated nation is an informed nation and has
consistently made education free for all citizens. A nation which is informed is also a
nation whose labour force outcomes will be affected by the amount of information they have. Education makes one less vulnerable to abuse and also helps towards actualization
of one's independence. According to the criteria of Millennium Development Goals
Fi ure 3: School Enrolment 1995-2007) ----~---, 120 110 100 90 ~ <.; ...
..
c. 80 70 60 50 II- school enrollment. primary(% gross)
...
----
-...
-- chool enrollment, secondary(% gross)
""'
-
..
--
-
-1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Source: World Bank Dum base for Various Years (Year)
Botswana has recorded remarkable progress in the provision of educational services to its people since independence. At independence in 1966, Botswana had 40 Batswana who were university graduates and about I 00 with senior certificates (Siphambe, 2007). Lack of skilled and educated Batswana was reported to be one of the constraints on development at independence and many years afterwards. In order to meet most of the critical manpower needs demanded by rapid economic growth, the government had to rely mostly on foreign skilled workers, which was very expensive for the government. J7igure 3 shows a consistent increase in both primary and secondary school enrolment in Botswana. The country has made the MDG · s standard of providing basic education for her citizens of her target. However, secondary school enrolment has been lower when compared to primary school enrolment.
Inasmuch as the discussion focuses on labour force participation. most of the arguments also apply to labor supply in general. A formal approach relating health and labor market behavior treats health as human capital. Becker (1964) drew an analogy between "investment" in health and in other forms of human capital such as education. This approach was further developed by Grossman (1972). See Currie and Madrian (1999) for a detailed discussion. In this approach, both employees and employers value health like
they value education because health and the capacity or ability to perform a job adequately are closely related. Obviously, poor health is likely to have an adverse effect on work performance and leads to lower productivity. As a result, people with poor health
have a lower probability of being employed under the prevailing wage rate. On the other
hand, low productivity associated with poor health decreases individuals' earning potential, the opportunity costs of leisure and therefore their willingness to participate in the labor force. Thus, according to human capital theory, health and labor force participation (or labor supply in general) are positively related. That is, better health is
likely to lead to a higher probability of labor force participation. This argument is not disputable, and there has not been such a study in Botswana to assess the impact of health
and the role of education on labour force participation.
1.1 Statement of the Problem
Health and education are generally regarded as crucial contributors to a nation's stock of human capital. Human capital is a determinant of individual labor market outcomes
because it is positively associated with workers' productivity, since abundant human
capital underlines strong incentives for people to engage in paid work (Becker, 1994). A
lower risk of unemployment and the expectation of higher wages create financial incentives for workers with these attributes to join the labor force (Laplagne, et al, 2007). In addition, health problems impose a cost on the economy in terms of production loss
and reduced participation by those with poor health. In Botswana, the possible expansion of education is limited by the pace of national development in a variety of other areas. Parents are exercising rational choice over whether or not to send their children to school. The introduction of universal schooling does not go hand in hand with the improvement of socio economic conditions to the point where children still viewed as an essential source of labor or income for poorer families (Botswana, Vision 20 16). The primary and secondary enrollment has increased over the years which were depicted in figure 3.
Based on the literature reviewed by this study, an improvement in health can be related to
an increase in health expenditure, invariably should be positively related to labor force participation. The review of literature also indicated that an increase in population
between the ages of IS and 64 implies an increase in labor force participation. This proposition is contrary to the Botswana case which is evident in figures 1 and 2. The problem is that if this decline in the labor force participation in Botswana persists, the
economy might in the long run face stagnation and become more dependent on diamond
revenue. It can also result in situation where Botswana losses her comparative advantage
in some of its animal product expons which are labor intensive. Another problem it can
pose to the economy is that its strategy to diversify her economy might not be achieved.
For this reason, this current study assesses the impact of health and the role of education on labor force participation in Botswana. Little research has been done to explore the impact of education and health on the labor force participation in Botswana.
1.2 Justification of the study
The findings of the study are important in the followings ways: it will assist policy makers in their decision making and to know if health and education arc affecting the labor force participation rates in Botswana. The study will assist the government of Botswana in its
budget preparation regarding economic development via improving the labor force participation. It will also assist potential investors in their decision making regarding to
which sector of the economy they wi II channel their resource to.
The study sourced its data from reputable sources such as the Bank of Botswana and the
World Bank World Development Indicators database. The methodology the study adopted was very critical in achieving its objectives. The model specification captured all the relevant variables that are critical in affecting labor force participation. Finally, the study
uses Eviews 7 software in its data analysis.
1.3 The Objectives of the Study
The main objective is to assess the impact of health status and role of education on labour force participation in Botswana. The specific objectives are:
• To exnmine the impact of education and health on female labour participation within an integrated modelling framework in Botswana.
• To examine the impact of education and health on male labour participation within an integrated modelling framework in Botswana
• To recommend ways of improving the impact of health status and role of education on labour force participation in Botswana.
1.4 Research Hypothesis
The following research hypotheses guided the study:
• Education is positively related to the labour force participation in Botswana.
• Individual health status and labour force participation is positively correlated. • There is a positive or negative feedback effect from labour force patticipation if
working affects a person's health depending on the nature of the job.
1.5 Study Outline
The study is divided into six chapters. Chapter one discusses the background information
concerning labour force participation in Botswana, statement of the research problem,
justification of the study, research objectives, and research hypothesis. Chapter two gives an overview of Botswana economy, while chapter three presents the theoretical and
empirical literature from other related studies. The methodology used in the study is
presented in chapter four while chapter five presents the results of econometric modelling
and interpretations. Chapter six summarizes the main findings, and provides conclusions and policy recommendations.
CHAPTER
TWO
OVERVIEW OF BOTSWANA
'S EC
O
N
OMY
2.0 Introduction
The chapter discusses the demographic and socio-economic characteristics of Botswana.
The discussion covers the following aspects: economic performance, governance, employment, labour market policies, education, health and conclusion.
2.1 Economic Performance
Botswana has developed from a least developed country (LDC) status at the time of
independence in 1966 to middle income country (MIC) status within three decades, largely owing to the effective use of revenues from mineral resources following the discovery of large diamond reserves. It lias managed to graduate out of the group of
poorest and least developed countries, and has now moved into the group of upper middle income countries in the World Bank classification (World Bank, 2010). Between 1966 and 1995, Botswana's per capita gross domestic product grew from the equivalent of approximately P 1682 to P7863 (expressed in I 993/94 prices), an average annual increase
of six percent (Government of Botswana, Vision 2016: 14). Botswana's average gro\.vth
has been quite high compared to its neighboring countries in the Africa region (Siphambe, 2007). Between 1966 and 2000 Botswana's real per capita economic growth was an average 6.9 percent per year, one of the highest growth rates in the world and even outpacing the "Asian tigers'' though it has been surrounded by wars of independence and civil unrest in neighboring countries (Kiaverene/ al., 2009). The World Bank (2009) hails the country as one of the world's great development success stories (Kiaverene/ a/ ..
2009). Botswana's per capita gross domestic product grew to the equivalent of approximately US$7, 513 in 20 I 0 from US$ 6, 035 in 2006 (World Bank. 20 I 0). The main contributor to the growth of' Gross domestic product was the mining sector. Lack of
diversification has seen the country depending largely on the mining sector in general and diamonds in particular (Sinha et al. 20 II). evertheless. the government has committed
itself to diversify the economy away from mining and few major export commodities (National Development Plan I 0).
Table 1: Sectoral distribution of Bot wana's Gross Domestic Product, 2002-2009 at constant (1993/94) prices-Millions of pula
Economic activity 2002
Agriculture 400.9
Mining 8250.3
Manufacturing 668.6 Water and Electricity 428.9
Construction 1130.1 Trade. llotels and Restaurants 1871.4 Trade cxcl Hotels and Rcstaumnts 1604.0
Hotels and Restaurants 267.4
Transpon 633.1
Banks, Insurance and Business 1968.9 General Government 3053.1 Social and Personnel 694.5
2003 461.6 8799.9 698.0 454.4 990.0 2079.8 1741.9 337.1 613.4 1987.0 3298.6 732.0 2004 420.6 8962.1 740.3 488.5 1074.7 2156.2 1830.2 325.7 639.2 2051.2 3557.3 820.9 2005 401.2 9134.2 785.4 490.5 1009 4 2051.7 1715.6 336.1 720.7 2238.5 3740.0 902.9 2006 397.4 9854.8 811.0 519.8 1032.9 2245.1 1765.6 479.5 794.8 2404.6 3693.4 921.4 2007 432.8 9661.7 952.8 544.9 1183.0 2487.7 1952.6 535.1 881.8 2606.3 3847.6 973.8 2008 434.3 9308.7 972.3 574.1 1208.7 2611.9 2050.3 591.6 1011.0 2996.6 4146.6 1040.1 2009 547.5 6787.5 925.8 578.9 1366.8 2728.1 2080 648 1132.1 3112.1 4299.6 1165.8 Total value Added, 19099.9 20114.9 20910. 2147.4 22675.3 23572.5 2-B34..1 2244.2 Gross Adjustments items of\\hich:
F1S1M Taxes on imports Taxes -634.9 777.4 on 482.2 Subsidies on products/production
Total GOP at constant price
Total GOP excluding mining value GDP per capita(pula)
GDP per capita Excluding mining
-99.9 1962-1.7 11374.3 11689.0 6774.9 -730.·1 860.5 693.8 -82.6 20856.2 12056.2 12282.7 7100.2 -655.0 981.6 965.8 -101.1 22102.2 13140. 12875. 7654.5 -754.0 952.6 895.3 -105.5 22462.9 13328. 12973. 7698.1 -866.2 I 031.6 878.9 22462.9 23613.2 13758.7 13530.1 7883.4 -1060.2 1349.6 1000.9 -114.6 24748.2 15086.5 14084.3 8585.8
Remarks Esumatcs arc unadjustl-d for seasonal \anauon. FISIM-Fmanc•allntenned1at10n Scr> 1ccs lndu<!<:tly measured Source 13ots\\ana Central Stausucs Office, StatiStical Year !look 2009
·1323.8 14774.4 1157.6 -24.8 25520.8 16212.1 14425.4 9163.7 -1384.3 1563.7 1302.3 -136.1 23989.8 17202.4 13468.1 9657.5
The mining sector accounts for the largest share of gross domestic product over the years. In 2009, the largest contributor to Gross domestic product was the mining sector, followed by general government, and the least was Hotels and Restaurants sector. Even though growth of GOP has been impressive during the review period, such growth has not been able to create enough employment for the economy. since the mining sector has been a major source of the growth, whereas its nature of work is capital intensive and has limited opportunities for employment creation (Siphambe. 2007:8). Lower inflow of FDI into non-mining sectors has accentuated the problem of diversification and job creation.
The overall employment elasticity has declined from 0.89 during 1980·-91 to 0.34 during
1991-2005 (Siphambc, 2007).
2.2 Governance
Botswana has been praised as a rather unique example of an cndluring multi-party democracy with a r•ecord of sound economic management that has used its diamond riches for national advancement and maintained an administration free of corruption (Martin, 2009). The world Bank (2009c) acknowledges that Botswana's impressive track record of good governance and economic growth, supported by prudent macro-economic and 'liscal
management, stands in contrast to the country's still high levels of povc1ty and inequality and generally low buman development indicators (Martin, 2009 :9)."lnstitutions such as the World Bank, United Nations Economic Commission for Africa, Transparency
I ntcrnational, etc have all ranked Botswana in the top 25 per cent of various governance indices world-wide., and in most cases, the country tops in the African region. A number
of factors are responsible for this good pcrfonnancc: availability of resources, prudent
management of tht~ economy and efficient allocation of resources, effective national development planning, dedicated leadership, discipline, adequate institutional architecture and administrative functioning, in-built checks and balances. improved technology, and respect for law and the judicial system" (African Development Bank, 2009).
2.3 Employment
At independence. a large number of Batswana were employed in outh African mines. The discovery of minerals, especially diamonds in the early 1970s contributed significantly to exports and government revenue ( iphambe, 2007). Government policy has been to use mineral revenues for development and investment rather than consumption. The revenue generated from diamond mining has been used to finance government programmes and projects, thereby creating employment lor the Batswana. High public spending led to an expansion in public sector employment, in addition to boosting employm•ent in the private sector, especially in construction. retail and
distribution, and services related to the diamond industry (Botswana Vision, 2016:4).
However, as outlined in Vision 2016, recent years have seen a decline in the rate of employment growth and the challenge is to find new and productive activities that will provide future growth in employment and income earning for the bulk of the people. Preliminary results from Botswana labor force survey 2005/06 estimated unemployment rate at 17.6 percent. An expansion of small and medium sized enterprises, exploitation of foreign markets through exports and liberalization trade areas, among others, would help the country to achieve its target of full employment as outlined in Botswana's Vision 2016.
Figure 4: Labour Force Participation Rate and Population by age groups 15-64 1980-2007)
Source: World Bank indicator for various years (Year)
- Population ages 15-64, male (%of total population)
~Population ages 15-64, female(% of total population)
- Population 15-64 (%of total population)
...,_Labor force participation rate, female (%of female population ages 15-64) - Labor force participation rate, male (%
of male population ages 15-64) Labor force participation rate. total (% of total population ages 15-64)
Figure 4 shows that the population of female population between the ages of 15-64 years
are more than their male counterpart but their labour force participation rate is lower than their male counterparts in Botswana. The percentage of people between the ages of 15-64 years has grown between 50- 63 percent from 1980-2007. The labour force participation rate of males fell between 1980 and 1985 while female participation rate increased in the
same period. In general, there was a fall in labour force participation rate in Botswana
According to the projections produced by Central tatistics Office of Bots-.vana, the medium variant projections show that the population will reach 2.25 million by the year
2016, growing at an average of 2.1 percent per annum and that the working population will grow faster than the dependent population. i.e. 2.6 percent as opposed to 1.5 percent. The projections predict that the GOP would rise by 7.9 percent per annum, and since the
size of the labour force only rises by 2.9 percent per annum, the difference will need to be made up by increasing labour productivity. The growth rate required for labour productivity in the projections averages about 3.9 percent during the 20 year period. Improvements in labour productivity can be brought about by improvements in worker's
skills and their application (Tabengwa and Salkin, 2006). In recognition of the need to fast track labour productivity, government policies have been focused on developing human capital (education, heallh) in order to stimulate labour force participation rate.
2.4 Labour Market Policies
Botswana's labour market policies are deducible from an analysis of its income policies and institutions that have been developed over time as part of a tripartite system to bring together workers, employers and government. With regard to Botswana's income policy that was adopted in 1972, its overall aim was to avoid rapid wage escalation that could lead to growing income disparities and social discord. Furthermore, this was intended to
cover areas where the dynamics of market forces in determining prices, wages and incomes may not result in efficient and/or equitable results (Siphambe, 2007). The
government viewed wage restraint as a crucial ingredient in its overall macroeconomic pol icy framework for employment creation and protecting workers and consumers from monopolistic exploitation (Tabcnga and Salkin. 2006). The Revised National Policy on Incomes, Employment, Prices and Profits was adopted in 2003-04 with a view to aligning Botswana's incomes policy with the best international practices, as well as with the
county's vision 20 16 and other national policies (Tabengwa and Salkin, 2006). orne of
the components of the policy arc the introduction of minimum wages for agricultural and domestic service workers.
In addition to the income policy. a number of institutions were developed as part of a
tripartite system to bring together workers. employers and government. Some of these institutions are: the National Employment, Manpower and Incomes Council (NEMIC). the
Wages policy Commitlee (WPC) and the Minimum Wages Advisory Board ( iphambe. 2007). Currently, the mandate of the National Employment, Manpower and Incomes Council (NEMLC), which advises the government on the remunerati.an of the public
service has ceased. The bargaining council has been established to steer collective
bargaining between public service trade unions and the government as an employer
2.5 Education
Botswana has recorded remarkable progress in the provision of educational services to its people since independence. At independence. Botswana had 40 Batswana who were
university graduates and about 100 with senior certificates ( iphambe, 2007). Lack of skilled and educated Batswana was reported to be one of the constraints on development
at independence and many years afterwards. In order to meet most of the critical
manpower demanded by rapid economic growth. the government had to rely on foreign
skilled workers, which was very expensive for the government. For example. just two
years prior to its independence, only 24 of the 184 administrative po:sts were held by Batswana. Even at lower levels. only 275 out of 623 posts in the technical. executive and secretarial grades were held by Batswana (Siphambe, 2000). Consequently, the
government used its revenues to expand schooling both in terms of physical facilities and
an increase in enrolment (Siphambe, 2007). The government also made sure that children no longer walk long distances to school and their nutritional needs are met, including food
rations for destitute children during holidays: and essential learning materials have been provided so that the bulk of the cost of education does not fall on parents (Ministry of
Education, 2009).
The primary school gross enrolment has risen to about l 07 percent in 20 I 0 compared with a level of 98.3 per cent in 1999. Adult literacy has risen from 69 percent to 84 percent between 1991 and 2009 (World Bank, 2010).1n relation to other Sub-Saharan Africa
(SSA) countries, the increase in gross enrolment rate for both primary and secondary school was exceptional. For example, average primary school gross enrolment for sub-Saharan countries increased from 58.9 percent in 1999 to 78.0 percent in 20 I 0. which is quiet lower relative to Botswana's enrolment. Total public spending on education as a percentage of GOP has risen from 8 percent in 2007 to 8.9 percent in 2009 (World Bank,
20 I 0). This shows that there has been a significant increase of about 0.9 percentage point between the two periods. Despite an improvement in the provision of educational services and literacy rate. the problem currently lies in creating jobs to those who have completed their studies. The 2005/06 Labour Force Survey indicates that the unemployment rate for those who have completed junior secondary dominated the currently unemployed with
36.3 percent, followed by primary and secondary completers with 25.5 and 21.6 percent respectively. Those who never attended school accounted for 13.8 percent. The reason for this trend, as indicated by Siphambe (2000) could be attributed to the fact that, school leavers are filtering down occupation hierarchies, as jobs that were previously the
preserve of illiterates and primary school graduates are now competed for by secondary school graduates. As a result of this filtering mechanism, primary school leavers would
be most affected. Further, the study reveals that the majority of the currently unemployed were women, with 38.6 percent having completed junior secondary school, followed by those who have completed primary school with 6.1 percent, while those who completed
secondary school accounts 20.4 percent of all currently unemployed females. It is also interesting to find that those women that have completed primary education are concentrated in rural areas, with a higher proportion of 53.5 percent, compared to those who have completed junior secondary and senior secondary with 55, 080 and 35, 178
respectively (Central Statistics Office. 2008). The reason could be partly because they are
being pushed out of the labour market to low payingjobs found in rural areas.
The Botswana Revised National Pol icy on Education (RNPE) of April 1994 has guided
the programme activities of the Ministry of Education in terms of curriculum reforms and ongoing improvements in the education system since National Development Plan 8. The implementation of the RNPE was intended to cover a timeframe of25 years given that its recommendations had been classi ficd for implementation in the short. medium and long
term, respectively (Botswana Federation of Trade Unions (BFTU), 2007).
measures have been implemented, among others; abolition of school fees from pnnt<uy ·~ tertiary, providing uniforms to destitute persons and remote area dwellers, providing
assistance to private and aided schools, establishment of the national I iteracy program and other programs provided by Botswana training authority in an effort to encourage and equip Batswana with necessary skills so that they could contribute significantly to the development of the country. Despite an improvement in the accessibility and quality of Education in Botswana. it has been observed that education system in Botswana is an academically oriented schooling system that does not encourage diversity of career opportunities (Ministry of Labour and Home Affairs, 2004). In 1998, the government adopted the National Vocational Education and Training Policy ( 1998), to deliver training that meets the requirements of the industry and to provide initial training to school leavers to enhance their opportunities for employment and self-employment (BFTU. 2007). lt was under this policy that Botswana Training Authority was established in 2000, with the overall task of monitoring and regulating vocational education training, and also to support the establishment of skills bases at the work places by reimbursing employers training cost incurred for training their employees. The educatio111 sector has always received the I ion's share of both the development and recurrent budgets of government, and as a result of this effort, there has been a large increase in the number of graduates
from all levels oJf schooling, some of whom are unable to find jobs in the labour market
(Siphambe. 2007). The mismatch between the supply of tertiary graduates and market demand for labour led to an escalation of the minimum requirements for available jobs,
therefore. jobs that were previously the preserve of illiterates. and primary school
graduates arc now open for competition by secondary school graduates (Siphambe, 2000).
The government has also adopted an IllY/AIDS school policy to help children who arc infected and affected by HIV/AIDS. Other programmes that have also been introduced as
part of school curriculum in order to fight the pandemic include: Life Skills Education Programme. with the possibility of a peer-education mode of delivery in order to infuse
life skills across the school curriculum (Central Statistics Oftice (CSO). 20 I 0); Teacher Capacity Building Programme. with help from the United ations Development
Programme (UNDP) and the African Comprehensive HIV/AIDS Partnership. The programme supports teachers in their frontline efforts to limit the spread of the pandemic and also promote cultural and behavioural changes in order to prevent the spread of IllY/AID (CSO, 20 I 0).
2.6 Health
In the health sector, the government of Botswana has provided relatively good health
infrastructure since independence. The investment in health grew at an annual average of
13 percent from I 976 to 1994 (Thobogang, 2006). The last decade has seen a 50 percent
increase in the number of beds available in hospitals and clinics. and provision of health
posts and mobile stops in rural areas, improvements in the number of doctors (2.3 per
thousand in 1994 compared with less than I per 20, 000 in 1966) and nurses (22.6 per thousand in 1994 compared with less than 1 per 20. 000 in 1966 (Government of Botswana, Vision 2016). As outlined in Botswa~na's Vision 2016, health services are well
above average developing country standards, reaching some 90 per cent of the population. Life expectancy at birth currently stood at about 55 years compared to 52 years in 2006 (United Nations Population Division, 2009). Improved sanitation facilities as a percentage of population with the access to facilities stood at 60 percent (World Bank, 20 I 0).
Despite the improvement in health services, HIV/AIDS and other related diseases remain
a challenge to economic growth and labour force participation in Sub-Saharan Africa and particularly in Botswana (Kiaveren et al., 2009). Total expenditure on health in Botswana as percentage of GOP stood at I 0.3 percent from 4.2 percem in 1995, while health share of domestically funded government expenditure estimated at 12.9 percent from 7.7 percent in 1998(World Health Organization (WHO), 20 II). Due to increased expenditure on healthcare, training and sick pay, investments as well as savings will be significantly
reduced. Loss of educated and trained people in the most productive years of their I ives yearly growth over the period 2001-2021 has been predicted that it would fall by 1.5-2.0 percent, resulting in an economy 25-35 percent smaller as a result of IIIV/AlD than it
declined from 39.3 in 1991 to 25 in 2007. Life expectancy also decreased from 65 years in 1991 to 50 years in 2007 (CSO, 2007). The prevalence and incidence of non-communicable diseases such as cardiovascular diseases, diabetes and cancers are also on the increase. Figure 5 below illustrates the trends in I IIV I AIDS prevalence rate in the two periods (2004 and 2008).
Fi ure 5: HIV/AIDS Prevalence Rate b
45 40 35 30 25 20 15 10 5 0 Prevalence Rate
- HIV prevalence (2008) - HIV prevalence (2004)
ource: Botswana BI\'/.\IOS Impact Survey II (2004) and Botswana Hl\'h\IDS Impact urvey Ill (2008)
The graph shows that the Age Group 30 -34 (middle age) years has the highest prevalence rate of 40.2 percent and 40.6 percent in 2004 and 2008 respectively. The prevalence rate is lower for the older and younger ages as compared to the middle aged. The national prevalence rate was estimated at 17.6 percent in 2008, compared to 17.1 percent in 2004, a slight decrease of 0.5 percentage points.
The health care system in Botswana is based on the principles of Primary Health Care
(PHC) as contained in the Alma Ata Declaration of 1978 (Ministry of I lealth, 2006 cited in BFTU, 2007). The Botswana Health care (81 IC) delivery system comprises
government health institutions, missionary. mine and private-commercial health institutions. The National Health Care system is organised hierarchically into mobile
stops, health posts, clinics, primary hospitals, District hospitals and referral hospitals at
Policies, norms, standards and guidelines lor health serv1ces delivery as well asthe provision of secondary and tertiary care whiles the Ministry of Local Government (MLG) is responsible for the delivery of primary healthcare services through District Health Teams. The government devoted 6.4 percent of its Gross Domestic Product (GOP) to healthcare services in 2007 (United Nations Development Programme (UNDP), 2008). Approximately 84 percent of population lives within 5 km radius from the nearest health facilities at national level; II percent of population lives between 5 to 8 Km radiuses, hence, totally 95 percent of the population lives within 8 km radius of any health facilities. In 2009, close to 90 percent of Botswana population is within easy reach of a health care facility. The health and medical personnel are evenly distributed across the country, with specialized professionals being at referral hospitals, while the general medical and other health professionals arc located in the district and primary hospitals (Owolabi and Shaibu, 1999).
With its rating as an upper middle income country, Botswana has seen the reduction in the number of development partners. The few that have remained have mostly concentrated on supporting the area of lilY/AIDS, and more recently Tuberculosis (TB). The largest external donor in the health sector is the United States of America through President's Emergency Plan for AIDS Relief (PEPFAR/Emergency Plan) and Centre for Disease Control Botswana and United tates of America (BOTUSA), The African Comprehensive 1-IIV/AIDS Partnerships (ACHAP), The European Commission, UN agencies (especially UNICEF and UNFPA); Japan through Japan International Cooperation Agency (JJCA) and the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM). The partners are coordinated through the Ministry of Heallh and the National AIDS Coordinating Agency (NACA) for the HIV/AIDS related activities. In terms of health financing, the government provides over 90 percent of the overall expenditure on health. Other major contributors are the U Government and ACHAP.
2.7 Conclusion
Since independence, Botswana has managed her resources well. The government has seen the need of providing an enabling environment for her people by introducing a vision 2016 in line with some of MDG's goals. The government has put in place policies to promote equality in its labor force laws. Education and health expenditure in Botswana has been the government priority since independence and there have been some international assistance such as JICA and ACAP but government of Botswana contributes 90 percent of such Budgets.
3.0 Introduction
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The chapter provides the review of theoretical and empirical literature on labour force participation. It gives an insight of the impact of health and education on labour force participation with different analytical and empirical evidence from different authors. In
effect, the chapter summarizes the main findings of reviewed literature that serve as a guide in the formulation of the study model. The literature review is divided into three sections. The first section reviews the theoretical literature while the second section
focuses on empirical studies and the last part is a conclusion.
3.1 Review of Theoretical Literature
In an attempt to understand the dynamics attendant to education and health and how they impact on labour force. the current study uses '·Human Capital Theory'' as its theoretical framework. The theoretical underpinnings of human capital investment go back to the
work of Becker and Tomes (1979). This original formulation of the theory was later
reworked by Becker ( 1994). The theory states that education or training raises the productivity of workers by imparting useful knowledge and skills, hence raising workers' future income by increasing their lifetime earnings. It postulated that expenditure on
training and educaLion is costly, and should be considered an investment since it is
undertaken with a view to increasing personal incomes (Becker, 1994). The human capital model states that an individual's decision to invest in training is based upon an examination of the net present value of the costs and benefits of such an investment. Individuals are assumed to invest in training during an initial period and receive returns to the investment in subsequent periods. Workers pay for training by receiving a wage which
is lower than "hat could be received elsewhere while being trained (Zamora, 2007).
Since training is thought to make workers more productive, workers collect the returns from their investment in later periods through higher marginal products and higher wages.
productivity in only one firm, and general training, which increases productivity in more than one firm (Zamora, 2007). General on-the-job training is financed by workers, and the workers receive all of the returns to this training. General on-the-job training increases a worker's productivity not only at the firm providing it. but also at other firms in the labour market (Kaufman and Hotchkiss, 2006). Such training includes such trades as electrician, economist and other formal training. In contrast, Speci fie on-the-job training increases a worker's productivity solely at the firm providing the training and the training is of no net value to other firms (Kaufman and Hotchkiss, 2006). Employees and employers will share in the costs and returns of specific training. Despite these differences between general and specific training, the model predicts that both forms of training increase workers' productivity and increase wage growth.
Contrary to Human Capital Theory, the I iterature also identities the screening and signal theory as a possible framework that could further explain the dynamics associated with the labour force participation. Blaug (2006) argues that the reason why education and earnings are positively related is not because education itself increases productivity on the job, but because employers consider the number of years of schooling as a reliable signal concerning native intelligence and trainability on the job. Employers generally use education as a screening device to get the most likely productive workforce (Kaufman and Hotchkiss, 2006). Education is used as a signal to identify workers who possess necessary skills and who are more likely to be trainable for the job. Therefore, an individual with a higher level of education are more likely to be employed in the labour force compared to an individual with lower levels of education.
Kotch and Ntege (2006) also considered education as a filter that reveals differences in workers' ability. Serumaga-Zake (2003) found that matriculation and standards 7 - I 0 plus a professional qualification increase the likelihood of participating in the labour force compared to those with no education. Those with primary and middle school qualifications have a higher likelihood of participation than those with no schooling. The findings support the human capital theory that predicts a positive relationship between education and labour force participation. According to Elhorst and Zeilstra (2007),
individuals with higher levels of education have necessary skills demanded in the market: they arc not vulnerable to layoffs and are more likely to put more effort into job search. Siphambe ( 1999) contirmed the prevalence of screening in Botswana, concluding that people engage in schooling to earn more rather than to be productive in the workplace. The job-competition model postulates that education awards students some form of certification, rather than equipping them with skills needed in the labour market, hence employers believed that by recruiting graduates. training cost would also reduced (Biaug.
1987).
3.2 Review of Empirical studies
3.2.1 Education and Labour Force Participation
Both labour supply and demand factors are important in shaping the relationship between education and labour force participation (Laplagnc, et a/., 2007). The amount of labour supplied by individuals tends to increase with education because higher educational attainment is associated with better wages and more enjoyable jobs (Laplagnc, eta/., 2007 citing Productivity Commission 2005). This is notwithstanding the fact that as wages rise, some people may opt for more leisure, rather than more income. On the demand side, employers offer higher wages to more highly educated employees because their productivity is usually higher than that of workers with lower education. Economic processes that increase the productivity gap between the two groups of workers, such as some forms of technical change, serve to heighten the labour force participation effects of education (De Laineet a/., 2000; Laplagnee/ al., 200 I). Elsewhere in the literature, it has been argued that the effects of greater educational attainment on labour force participation are partly a rencction of the relative supply of different qualifications at a point in time, and not only the absolute levels of qualifications since across board increases in the educational attainment of the population would not necessarily raise individual job prospects to participate; because employers' hiring decisions arc based on candidates relative. not absolute qualifications (Lattimore, 2007). Elder and Johnson ( 1999) found that the labour force participation rate for young people was lower since they arc still
attending schools and older people also experience lower participation rates since they are
retiring. The study by Hillman (2005) indicates that young people, who are in the lowest quarter of school achievers. are more likely to experience multiple periods out of the
labour force. Karmel and Wood (2004) argued that qualifications gained later in life have
as strong an influence on participation as qualifications earned earlier in life.
McMillan and Marks (2003: 17) indicate that literacy and numeracy achievement in Year
9 are related to better labour market outcomes. The persons with high I iteracy and
numeracy levels had lower unemployment rates than persons with low levels of literacy
and numeracy. Further, low literacy and numeracy skills in final years of school were the
most important predictor of post-school unemployment. Lamb and McKenzie (200 I) found that those with low literacy and numeracy skills had unemployment rates around I 0 percentage points' greater than high achievers. Marks (2006) investigated the transition to full-time employment of young people who did not go to university. People's labour market experience, immediately after leaving s·chool, that is, whether they obtained full-time employment or remained unemployed, was a good predictor of their subsequent
labour market experiences. Hillman (2005) confirms that young people who are in the lowest quarter of school achievers, are more likely to experience multiple periods out of
the labour force and not in full-time education. In regard to males aged 55 to 64 with no post-school qualifications, Kennedy and Hedley (2003) judge that the decline in participation since the 1970s has been 'dramatic'. While the average participation rate for males in that age group was around 90 per cent in the 1970s, it was only 60 per cent in
2004 (Kennedy and Hedley, 2003). A similar decline has not been a feature of the US economy (McEwen et al. 2005), suggesting that the fall in patticipation by mature age
males with low skills relates to factors specific to the country of origin.
Karmel and Wood (2004) found that the relationship between education and labour force participation is positive for older workers. especially women. Qualifications gained later in life had as strong an influence on participation as qualifications earned earlier in life.
Austen and Birch (2005) concluded that the participation rates of older women relate positively to the wage rate on offer. Since skiilled occupations typically attract higher
wages, the underlying relationship is with a woman's expected productivity, which is a function of her level of education and other forms of human capital. Gruen and Garbutt (2003) explored the possibility that Australia's labour force participation rate will increase over coming decades to 80 per cent of the level currently attained by comparable countries. They indicated that the major factors contributing to such an increase could include: recent rises in education levels nowing through to workers aged 45-65 over time; government policy changes; and changes in community attitudes to the employment of older workers.
Trovato and Vos (1992) pointed out that rapid development is often accompanied by higher female participation, higher levels of schooling for girls and lower fe11ility rates. This could be explained by the modernisation paradigm that postulates that a high level of female labour force participation is positively associated with a high level of modernity, hence social acceptance of women's employment and greater education, as well as lower fertility rates increase female labour force participation. On the other hand, females, especially with older children and being heads of household will utilise available opportunities for employment because the survival of their children depend on their access to the labour market (Siphambc and Motswapong (20 II). It has been argued that. on the demand side, women are pulled into the labour market due to structural changes in the economy as more job opportunities arc available in the market such as an increase in informal sector self-employment (Casale. 2004). The relationship between education and female labour force participation could also be explained under three hypotheses: opportunity cost hypothesis, relative employment hypothesis and aspiration hypothesis ( tanding, 1981 ). Under opportunity cost hypothesis the author argues that since education, investments and earnings are positively related, education raises the opportunity cost of economic activities thereby giving people a positive incentive to seek employment (Bowen and Finnegan, 1969). Under relative employment hypothesis, Oppenheimer (1970) argues that employers are biased towards a qualified female worker than older male workers whose educational qualifications increases her employment opportunities. Finally. it's the aspiration hypothesis, Cain ( 1966) suggests that level of education increases aspirations and expectation of people in the sense that more educated
women tend to expect higher level of income than less educated women, therefore they
tend to participate more in labour force.
llowever. in Botswana, an increase in the overall labour force participation was ho,,ever found to reflect an increase in the number of women in lower paid jobs and less secure
jobs. For example, 76.0 percent of females were employed as clerical and 65.1 percent
were employed in sales and services. The interesting part is that, most of these employed women are found in informal sectors in rural areas. On the supply side. women are pushed into the labour market due to a fall in accessibility to male's income. The shortfall in
income urges women to substitute non-market activities for income generating market
activities (Casale and Pose!, 2002). The decline in male income support was attributed to
high HIV/AlDS prevalence among men and also an increase in female-headed
households lead to a decline in women's' access to male income as more women choose
to remain unmarried (Pose! and Todcs, 1995). An overall increase in female labour force
participation was also attributed to an increase in married women now entering the labour
force. The increase in married women entering the labour force was also found to be atlributable to the availability of high quality childcare facilities that would ease the women's bulk of having to look after the children and enhancing women to become active
in the labour force (Graaf and Vermeulen, 1977).
Studies by Sackey, (200 I) found that the willingness of married women to participate in
the labour force stems from a desire to provide their families with a higher standard of
living, underscoring the welfare improvement rationale for female labour force
participation. The I iterature also suggests that culturally it was a taboo for married women
to work outside horne and married women were expected to spend most of their time
looking after children therefore their participation rale is lower than unmarried women
(Pillsbury, 2000). In contrast, Serumaga, (2004) found that unmarried women have higher
participation rate than married women since they have no alternative source of income.
llowever, Serumaga and aude (200 I) have pointed out that employers prefer married
women than unmarried women since they have lower turnover. The 2005/06 Botswana
married, while 22 361 were married. This is an indication that unemployment is higher in never married females compared to females that are married.
3.2.2 Health and Labour Force Participation
The health of the workforce is an important factor in sustaining and potentially enhancing participation. From a macroeconomic perspective, good general health raises income by increasing the proportion of society that is capable of participating in the labour force and by boosting labour productivity, both directly and indirectly, and by encouraging investment in human and physical capital (Jose el a!, 2004: 15). Human capital theory postulates that health status and labour force par1icipation are positively related. Several studies have found that health status innuences the labour force participation of individuals (Ogawa et al., 1994 Boskin, 1977, Adams et al., 2003 and Smith, 2004). Both employees and employers value health like they value education because good health capacitates an individual to perform a job adequately. Poor health is likely to have an adverse effect on work performance and leads to lower productivity. hence low productivity associated with poor health decreases individual's earnings potential, the opportunity costs of leisure and therefore their willingness to participate in the labour force (Grossman, 1972). Productivity may not only be the link between health and labour supply, since the onset of some health problems may change the individual's relative utility derived from income and time out of labour force (Cai and Kalb, 2004). The authors explained that poor health may cause individuals to value time out of the labour market more since the time needed to care for one's health increases with poor health. Poor health may also make the withdrawal from the labour market more attractive by inOuencing the time horizon over which economic decisions arc made, hence, lowering the probability of participating in the labour force (Chirikos. 1993). Poor health may also imply that individuals may need more health services, and in order to meet increased demand for health services, individuals may need to be active in the labour force (Cai and Kalb, 2004). It was also found that the impact of health on labour force participation is larger for older people than for younger ones. For example, from the estimates. it was found that. for an older man a deterioration of health from good to fair reduces the
probability of labour force participation by nearly 7 percent. For a younger man. the same change in health reduces the probability of labour force participation by less than I percent (Cai and Kalb, 2004:21 ). A study by Jones et al., (2004) using data from the J lousehold, Income and Labour Dynamics in Australia (HILDA) survey found only modest differences between the participation rates of those with excellent, very good or good health while those with fair or poor health have far lower rates of participation. Bound et at.. ( 1999) stated that deteriorating health is probably a better predictor of labour force participation at older ages than poor health per se since many of those that have suffered poor health over extended periods have already adjusted their lives and careers accordingly. The relationship between deteriorating health and participation also depends in part on the worker's skills and occupation. For example, high-stress occupations are more likely to lead to those with ill health leaving the workforce. However workers with well-developed and portable skills may more easily move into jobs that are more accommodative of their health issues than those with few skills or with job-specific skills only (Jose et al., 2004: 15).
Adam and Flatau, (2005) observed that the causality between health status and participation is not necessarily one-way; there will be a feedback effect from labour force participation to health if working affects a person's health. To improve or maintain health status. individuals need to invest in their health. which requires both time and material resources. and the availability of resources may depend on the individual's labour force status (Cai and Kalb, 2004). The relationship between health and work can also work in the opposite direction whereby participation in work can impact on health outcomes particularly in working environments that are stressful in a physical or mental sense, where jobs are less secure and where there is an expectation of long working hours. Alternatively. participation in the workforce can have psychological benefits in terms of improving self-worth and confidence through social interaction and achieving greater material self-sufficiency (Gilfillan and Andrews. 20 l 0: 96). According to Laplagnc, et al., (2007) working might increase a person's general activity level, thus improving physical health. On the other hand, the nature of one's work may lead to deterioration in health, either because of the effects of working long hours or. at the opposite extreme, because
