Study shows better health buys long-term wealth in developing countries

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Goldman Sachs research paper, entitled "Health Buys Wealth", shows cost-benefits of investing in health

New York, 3 December 2009 - Investing in better health treatment and prevention represents a "remarkably inexpensive" way to increase individual productivity in poorer countries, according to a new report published this month.

Global Markets Institute

Global Markets Institute provides research and high-level advisory services to policymakers, regulators and investors around the world. The Institute leverages the expertise of Research and other Goldman Sachs professionals, as well as highly-regarded thought leaders outside the firm, to offer written analyses and host discussion forums.

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The report, published by the public policy research unit of Goldman Sachs Global Investment Research, shows how fewer days of illness translates into longer working lives and higher earnings, especially in developing countries.

In addition, women, who have healthier children, have greater opportunity for paid work outside the household; in countries where the majority of health spending is out of pocket, better health lowers the risk of drawing on household savings to pay for medicine or specialist treatment.

Health and poverty intertwined

The report shows that, globally, bad health and poverty are deeply intertwined.

In the world's poorest countries, life expectancy at birth is estimated at 57 years; 41 of every 1,000 babies born will die within the first month of life; and a woman's lifetime risk of dying during pregnancy or childbirth is on the order of one in 75.

Contrast

By contract, in the world's richest countries, life expectancy is 80 years; only four of each 1,000 newborns will die in the first month; and the lifetime risk of dying during pregnancy or childbirth is just one in 8,000.

The researchers also focused on cost-effective strategies for prevention and treatment, and the obstacles to these strategies, as well as innovative health partnerships and the increasing use of capital markets to address these challenges.

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