Knowledge Brief Health, Nutrition and Population Global Practice TOWARDS A FRAMEWORK FOR IMPACT PATHWAYS BETWEEN NCDS, HUMAN CAPITAL AND HEALTHY LONGEVITY, ECONOMIC AND WELLBEING OUTCOMES Philip O’Keefe and Victoria Haldane February 2024 KEY MESSAGES: • Non-communicable diseases (NCDs) are one of the major health and development challenges of our time, impacting not only higher income countries, but increasingly lower income ones as well. It is important to define an operational framework for addressing NCDs in low- and middle- income countries. • The healthy longevity framework visualizes three main channels through which NCDs may impact end outcomes: (i) the macroeconomic/savings channel; (ii) the fiscal channel; and (iii) the human capital channel. • Within the human capital channel, a life course perspective is vital as NCDs impact human capital from conception through to old age, and across generations. NCDs compromise the entire trajectory of HC, from its formation to deployment to protection and preservation. Introduction and highlights policies which may influence those Noncommunicable diseases (NCDs) are one of the world’s pathways. It outlines a framework for examining the impact biggest health and development challenges. The pathways between non-communicable diseases (NCDs), preconception that NCDs are mainly conditions of rich human capital (HC), and end outcomes - primarily healthy countries is increasingly untenable, and the Healthy longevity, inclusive growth, and wellbeing. While the Longevity Initiative (HLI) is one of a growing set of efforts pathways and their linkages with policy are complex, the to increase the urgency of policy response across the framework aims to be as simple as possible, but sufficiently world. The need for raising the profile of the healthy open to accommodate multiple factors. longevity agenda has been made more pressing by the disproportionate and ongoing impacts of the COVID-19 The HLI complements the Human Capital Project (HCP) pandemic on people living with NCDs. and Human Capital Index (HCI) which focuses primarily on younger age groups up to age 18 years. It does so by An operational framework to address the impact of the taking a whole life course approach, with an emphasis on rising toll of NCDs on the lives and wellbeing of people in adulthood and, particularly, later years of life. The HLI also low and middle-income countries is essential to guide complement the HCP by developing the links between policy and programs to support healthy longevity. This brief human capital and a wider definition of wellbeing above presents a summary of the main features and and beyond the health and work domains. As such, the HLI considerations for such a framework with evidence from a can be considered in part an effort to extend the HCP selection of low- and middle- income countries (LMICs), across the life course, something the HCP itself is aiming Page 1 HNPGP Knowledge Brief • for as it evolves.1 Within this context, the role of NCDs as It is also important to note the data limitations that influence important influencers of human capital outcomes in adult measurement. For example, the education/skills element of life becomes more prominent. HC is usually proxied by years of schooling, or where data are available educational outcomes represented by test scores, and skills by years of work experience to proxy on- The HLI framework the-job skill acquisition. Increasingly, there is use of quality- To develop the HLI framework, we first define the major adjusted measures (where available) to capture actual factors to be considered in any framework, including key learning as reflected in the HCP’s use of this and other concepts and cross-cutting themes. We then outline a measures such as “learning poverty”. When measuring trajectory of human capital across the life course, returns to human capital, present value of future earnings supported by the evidence in literature on human capital is the most commonly used measure. This means that the and growth, followed with a detailed consideration of the standard measure of returns will have in-built bias towards key channels through which NCDs may impact inclusive men, especially in developing countries, due to lower growth, including distributional and gender considerations. female participation in market work and gender wage gaps. We then present key insights and a summary of policies and interventions that are likely to help minimize and IMPACT PATHWAYS manage NCDs and their impact on HC accumulation, deployment, and protection. There are three main channels through which NCDs impact growth (figure 1). These include: CORE CONCEPTS Figure 1. Impacts channels for NCDs and inclusive The core concepts, their definitions, and issues to consider growth for the HLI framework include: • Healthy longevity is produced across the life course and means avoiding death and serious disability in middle age, enabling a high level of mental and social functioning through middle and older ages, and includes a socially connected and reasonably pain-free, short period of time before death. • Noncommunicable diseases refer to the ‘big four’ i.e., cardiovascular disease, diabetes, respiratory diseases, and cancers as well as mental health. • Human capital as understood within the HCP is, “…the knowledge, skills, and health that people accumulate throughout their lives, enabling them to realize their potential as productive members of society.” • Wellbeing is a subjective concept from psychology with three distinct dimensions: evaluative wellbeing (or life 1. The macroeconomic/savings channel – despite satisfaction), hedonic - or affective - wellbeing (feelings much debate on the causal relationship between such as anger, happiness, sadness, etc.), and population health and growth, and challenges related to eudemonic wellbeing (sense of meaning or purpose) accounting for the role of non-health factors such as (Steptoe, Deaton, and Stone 2015). It is a key end goal institutions and geography, a growing body of empirical of good health and human capital, as it is of growth and work, including from developing countries, supports a the overall development process. negative relationship between NCD prevalence and economic growth. A starting point of the HLI is that health at the individual level, and the (increasingly NCD-driven) burden of disease 2. The fiscal channel - NCDs also have clear fiscal at societal level, are themselves important measures of impacts on the expenditure and revenue sides. Higher wellbeing, over and above their impacts on other outcomes NCD incidence increases the need for public spending on such as productivity and growth. Often, the health element healthcare services and aged care, which can lead to bud- of human capital is analyzed through life expectancy, or by get deficits and crowding out of private sector investment. some combination of mortality and morbidity indicators. On the revenue side, to the extent that NCDs compromise While the HCP, like many other sources and consistent workforce participation or productivity at work will reduce with the foundational work by Gary Becker, includes health revenues from labor income and corporate tax revenues. within the definition of human capital, this is not universally the case (see for example, OECD 2019). Page 2 HNPGP Knowledge Brief • 3. The human capital channel – growing evidence human capital profiles of parents and their children are suggests that the negative impacts of NCDs on human significant. This applies not just in transmission of HC and capital occur across the life course. NCDs compromise the direct well-being effects of health from parents to young entire trajectory of human capital and returns to human children, it also applies as parents age and their co- capital: its formation and ongoing accumulation, its morbidities and disability require increased care from adult deployment in terms of both duration and productive use, children, impacting the returns to their human capital, and its protection and preservation in the face of shocks mental health and self-reported quality of life (Lambert et and late life decline (figure 2). More specifically: al. 2017; Yiengprugsawan et al. 2022). • In early life, there is strong evidence that NCDs (including those of parents) and poor nutrition compro- Figure 2. Impacts channels between NCDs and human mise cognitive foundations, school attendance and capital across the life cycle learning outcomes, all impacting labor market outcomes in adult life. There are also immediate effects from the growing burden of childhood NCD mortality and morbidity. • During the stage of human capital deployment, NCDs ompromised oss of labor force due to death cognitive foundations can compromise returns to human capital, its further ac- hildhood oss of w or time due to disability induced illness mortality ow er productivity on ob (presenteeism cumulation, and accelerate depreciation through educed school ow er investment in further accumulation attendance worse nderutili ation of due to care burden several channels: (i) through total loss of labor supply ailure to provide care to children, partners parents are needs learning outcomes as a result of premature mortality (over 40 percent of NCD deaths occur before age 70); (ii) through reduced hildhood ncreased co returns to human capital from NCD-based morbidity and s, nutrition dult onset s morbidities ris behaviors s of older age disability, e.g., because of unemployment, early withdrawal, absenteeism or “presenteeism” (being at ross generational work but less productive); and (iii) through failure to impacts invest in further accumulation of human capital over adult life, e.g., due to reduction in on-job learning and behavioral impacts on subsequent efforts to accumulate A third important consideration is distributional. Within human capital. countries, there are clear socioeconomic gradients for • In the later stages of life, NCDs accelerate the incidence of NCDs, with their impact on both HC and well- depreciation of human capital, and the NCDs of older being of individuals. This is separable from the well-known parents contribute to under-utilization of human capital socio-economic gradients for HC overall. Poorer people on of their adult children in the labor market, particularly of average have higher incidence of most common NCDs women, due to care demands. There may be a ripple (Dalstra et al. 2005; Oshio and Kan 2019), lower effect for grandchildren as well as older age NCDs may educational attainment and on-job skills acquisition, and constrain the caring contributions of grandparents. returns to human capital that diverge further from their peers over their shorter life cycles (Deaton and Paxson CROSS-CUTTING THEMES 1998). While most evidence on socioeconomic status (SES) gradients is from developed countries, increased There are several cross-cutting themes which recur and evidence from developing countries suggests that sharp are useful to highlight. These include: socioeconomic gradients can also be seen for both NCD prevalence and risk factors in developing countries. In fact, First, that there are multi-directional relationships both income and education gradients for NCDs have been between NCDs and HC (figure 2), and between them and found to be even more pronounced in low-income countries healthy longevity, inclusive growth, and wellbeing. Crudely, than in middle-income countries (Hosseinpoor et al. 2012; HC and NCDs have a two-way impact on each other, and Malta et al. 2013; Williams et al. 2018; Allen et al. 2017; human capital may be affected by levels and rates of Sommer et al. 2015). growth, healthy longevity, and wellbeing. These complex relationships have contributed to much debate on the Another important dimension of inequality is gender. While extent to which relationships between these variables are NCDs dominate the disease burden globally for both causal or only correlational, though progress has been genders, there are differences in the gender-specific made on clarifying some dimensions of the question. patterns of NCD prevalence and risk factors. A further source of gender inequality relates to access to healthcare Second, in addition to the individual trajectory of human and patterns of care provided. Moreover, the burden of capital and NCDs, there are important inter-generational informal care for those with serious NCDs falls dimensions. The interactions between the NCD and disproportionately on women – nearly half the women Page 3 HNPGP Knowledge Brief • outside the labor market in middle income countries and subjective wellbeing may be a protective factor for health over a third in low income countries cite unpaid care duties and is associated with longer lives and lower morbidity. as the main reason for not participating in the labor force. A fourth insight is that the economic impacts of improved Conclusion health will vary by the stage of demographic transition, Just as NCDs impact HC and outcomes across the life which in turn is closely related to the level of economic course, policy responses to prevent and control them are development. Reductions in NCD prevalence will help needed from before birth to the end of life. The most direct improve longevity in all countries, but there are variations policy areas include nutrition, public health, and healthcare across stages of demographic transition and levels of services, where the economic and social returns to development at what stage that translates to lower fertility, investments are high, and affordable packages of essential increased HC investment in children, and other factors. NCD interventions are available. While cost-effectiveness The differential impacts across stages of demographic is an important consideration for developing countries in transition are observed in overall growth, savings rate prioritizing limited budgets, it is also crucial to integrate effects, and other factors. equity and financial protection considerations, as well as feasibility of implementation into decision making. Beyond Fifth, the structural and institutional environment of the health sector, there are improvements needed in countries matters for the scale (and even direction) of the taxation policies to shift risky behaviors (and raise relationships between human capital, NCDs, healthy revenue), as well as policies and interventions to reduce air longevity, growth, and wellbeing. This includes institutional pollution, improve road safety, adapt the built environment, factors of a more foundational nature, such as culture and and expand coverage of social security systems. attitudes, but also underlying institutions such as legal systems or protection of property rights (Acemoglu, More research on the influence of NCDs on outcomes of Gallego, and Robinson 2014). This also includes more interest is still needed, especially in developing countries. proximate policies and institutions such as social security While some of the channels are becoming better systems and labor market policies and institutions, which understood, and the knowledge base on NCDs and their have differing impacts on the returns to human capital socioeconomic and wellbeing impacts in developing across and within countries and the degree of protection countries is growing rapidly, there remains a huge provided to a given stock of human capital. Another is the outstanding research agenda. Evidence points to the built environment and the extent to which that facilitates or diversity of situations across countries and within them. In constrains labor force and social participation for those with particular, making the economic case for why NCDs matter functional limitations. It may also include wider issues not for development will be crucial to persuading policymakers traditionally considered in the social sectors such as of the urgency of and high returns to enhancing climate change. Apart from the aggregate influence of investments in NCD prevention and management. structural factors, they also play a role in promoting and sustaining inequalities and discrimination in accumulation, deployment, and protection of human capital, e.g., along References gender or racial lines. O’Keefe, P., and V. aldane (2024 “Towards a ramewor for Impact Pathways between NCDs, Human Capital and Healthy A final important point is that there are significant ongevity, Economic and Wellbeing Outcomes” in Unlocking the wellbeing benefits from investments in health capital Power of Healthy Longevity: Compendium of Research for the which do not show up in standard measures of returns to Healthy Longevity Initiative. Washington, D.C.: World Bank. HC, which rely primarily on labor earnings. Such non- pecuniary benefits, starting with the intrinsic value of being Please refer to the above publication for the full set of references alive and in good health, have direct bearing on individual used in this brief. and societal wellbeing which are independent outcomes of concern. These have received less attention in the End Notes literature, but evidence is growing that subjective measures 1. The HCP has introduced a wider set of HD indicators - the Human Capital Complementary Indicators (HCCI) - that take greater account of of wellbeing matter for health, and that health – and adult outcomes. HCCI vary by country and typically include labor force specifically NCD status - impacts subjective measures of participation rates by sex, youth unemployment/NEET rates, and life wellbeing. Poor health has been shown to reduce expectancy at birth. subjective wellbeing and lower subjective wellbeing This HNP Knowledge Brief presents key findings of research conducted increases the risks of premature mortality and a range of as part of the Healthy Longevity Initiative – a World Bank initiative in NCDs (Chide et al, 2008; Windle et al, 2010; Steptoe et al, collaboration with the University of Toronto, PAHO and others, and with 2019). Newer research also suggests that positive financial support from the Access Accelerated Trust Fund. The Health, Nutrition and Population Knowledge Briefs of the World Bank are a quick reference on the essentials of specific HNP-related topics summarizing new findings and information. These may highlight an issue and key interventions proven to be effective in improving health, or disseminate new findings and lessons learned from the regions. For more information on this topic, go to: www.worldbank.org/health. Page 4