Question

Please answer at least in 300 words. Please do NOT copy and paste from another source. Do you think that there is a strong relationship among health, labor productivity, and income levels? Explain your answer.

Answer 1

Indeed there is a direct and strong relationship among health, labor productivity and income levels.

Before we move ahead, let us understand what does economic growth means. In general economic growth means increase in income levels so that standard of living for the concerned person or a group of people increases.

In other words, we can say that economic growth brings prosperity to the people. What are the constituents of economic growth ?

The main constituents of economic growth are increase in productivity, be it through labor productivity or capital accumulation and its productivity, or one of the most important constituent is technological progress.

What if technological progress, and capital productivity is kept constant! As the question asks about the relationship between labor productivity, health and income levels, let us assume that technology and capital is kept constant.

It is labor productivity that is going to mainly constitute economic growth. But, what is labor productivity ? It is increase in efficiency of a unit of labor. For example, if one unit of labor was producing 10 units of output, the increased productivity means now one unit of same labor will produce output greater than 10 units. If labor productivity increases, more output will fetch more income for the sellers and now the seller can compensate more wages to the units of labor.

Above mentioned explanation is the simplest explanation of how labor productivity is related to increased income levels.

Now, if the workers working in steel plant are not healthy, will they be as efficient as when healthy ? No. This is how health, labor, and productivity are interrelated strongly with each other.