Can Benefits from Malaria Eradication Be Increased? Evidence from Costa Rica

The estimated benefits of malaria eradication have been very different in terms of human capital accumulation. This paper quantifies the impact of malaria eradication in Costa Rica and explores whether precampaign regional characteristics can improve or damage the benefits of a health campaign. There are several results. First, using difference in differences I find that years of education of men and women increased in response to the eradication campaign but that only wages of males increased. Results are robust. Second, worse conditions in the school system and more child employment displaced schooling. Hence, health benefits may not translate into educational gains when the school system characteristics are bad or when the child labor market provides a better investment opportunity than schooling. Third, combining empirical evidence with a simple model, the increase in schooling cannot solely explain the increase in the income of men; however, health improvements explain most of the increase. Finally, the point estimates show that human capital gains were almost completely eliminated when a shortage of funding for eradication led to a resurgence of malaria; this emphasizes the fragility of the estimated benefits.