How Health Affects Small Business in South Africa

How Health Affects Small Business in South Africa

Li-Wei Chao and Mark V. Pauly

Preventable and treatable diseases have taken a devastating human and economic toll on many developing countries. That economic toll is likely to be underestimated because most studies focus on productivity losses in the formal, or largefirm, sector; yet, a large portion of the population of developing countries works in the informal sector in very small businesses, either as an owner-worker or as an employee. It is plausible that ill health might affect small businesses most severely, possibly putting the entire business at risk. This Issue Brief summarizes a three-year study that tracks small businesses in Durban, South Africa, and investigates the connection between the owner’s health and business growth, survival, or closure. The results bolster the economic case for investing resources in the prevention and treatment of disease in developing countries.