Education, health, and labor force supply: Broadening human capital for national development in Malawi

Education and health are both capital investments in national development, often viewed as independent factors on a country's labor force supply and productivity. This study uses the 2010-2011 Third Integrated Household Survey in Malawi to propose an Education-enhanced Health Human Capital (EHHC) model where education influences labor force supply directly as well as indirectly through improvements in adult health. Relative to the Health Human Capital (HHC) model, the EHHC model better fits the available data, capturing the multiple effects of education. A national economic simulation of the 2013 age 13 cohort in Malawi confirms the importance of education as a tool for national development. Specifically, if the mean education of the age 13 cohort increased from the present national mean to the completion of secondary school, the total effects of education would lead to a predicted increase in annual tax revenue of 580 million Malawian Kwacha.