NUTRITION, HEALTH AND LABOR PRODUCTIVITY ANALYSIS OF MALE AND FEMALE WORKERS: A TEST OF THE EFFICIENCY WAGE HYPOTHESIS

The objective of this study was to examine the effect of nutrition and health on labor productivity for women and men workers on subsistence farm households. The study emerged from the well founded Efficiency Wage Hypothesis which asserts that nutrition affects labor productivity in subsistence economies. This study develops the Efficiency Wage Hypothesis further by including an anthropometric measure of health along with caloric intake and other production inputs in the productivity analysis The conceptual model was based on an economic model of household behavior developed by Gary Becker. Through optimization it was shown that consumption and production decisions were not separable. The relevant step was to estimate an inherently non-linear production function for the household. The empirical model specified dual causality between consumption and production , and thereby used a simultaneous equation system. A two-stage least squares estimation with instruments was used in the production function estimation to control the endogeneity in the model. The data set consisted of a sample of forty households from six villages in India, covering three broad agroclimatic zones. Output value of production, inputs into the production including caloric consumption of the individuals in the households and anthropometric measures of health, were available in the data set, enabling the study to use all this information in the estimation of labor productivity. The empirical results showed that an increase in caloric consumption increased the female labor productivity but health, as measured by weight-for-height, of the female workers was not significant. Caloric consumption of the male workers did not contribute to their productivity but their health, as measured by weight -for-height, significantly added to the value of output. Hired workers, cultivated area, input of fertilizer, bullock labor positively affected the value of farm output. Increased daily caloric availability and consumption of female workers can be recommended to increase the productivity of the households. Health, as measured herein, can be viewed as a function of past calories and in that context increasing the present caloric consumption of the households would improve health and productivity of the workers in the future.