Causal Effect of Health on Labor Market Outcomes: Evidence from a Random-Assignment Iron Supplementation Intervention

Duncan Thomas, University of California, Los Angeles
Jed Friedman, World Bank Group
Nathan R. Jones, University of California, Los Angeles
Bondan Sikoki, SurveyMETER
James P. Smith, RAND
Wayan Suriastini, SurveyMETER
Christopher McKelvey, University of California, Los Angeles

Iron deficiency is widespread throughout the developing world. We provide new evidence on the effect of iron deficiency on labor market outcomes drawing on data from a random assignment treatment control design intervention. The Work and Iron Status Evaluation is an on going study following over 10,000 adults in Central Java, Indonesia. Half the respondents receive a treatment of 100 mg of iron every week for a year; the controls receive a placebo. Compliance is monitored carefully. Contrasting changes in labor market outcomes for treatments with changes in outcomes for controls, we are able to pin down the causal effect of iron supplementation on economic success. We focus on hours of work, type of work and income from work. In an effort to identify pathways through which iron status affects economic prosperity, we examine changes in physical and psycho social health as well as self reported indicators of overall health.