Thursday, January 24, 2019

JKN and human capital

This morning I finished reading two papers on my commute. The first one is a paper about JKN which was recently published in the Lancet. Most of what's covered there are familiar grounds for me, but this one paragraph near the end struck me as very interesting:
Another lesson that Indonesia and other LMICs should learn from higher-income countries is that UHC correlates with increasing per-capita GDP in all countries where the system is implemented. The Netherlands achieved UHC in 1966, and thereafter showed higher GDP per capita than before UHC was implemented. France reached UHC in 1974 and Italy in 1978, and both countries showed increased GDP per capita with UHC. Lastly, South Korea quickly achieved UHC after 12 years of implementing social health insurance schemes, and also showed increased GDP per capita (appendix) once UHC was in place. Although UHC was not the sole determinant of this increase in GDP, no evidence suggests that UHC caused decreased economic growth. The lesson for developing countries is clear, do not assume that UHC will place an economic burden on the country. (Agustina, Rina, et al. "Universal health coverage in Indonesia: concept, progress, and challenges." The Lancet (2018).)
Note on abbreviation: UHS is Universal Health Coverage. I don't think I've seen this argumentation very often when JKN is discussed. (Oke skeptisisme pertama adalah korelasi tidak sama dengan hubungan sebab akibat, tapi karena gue ga hafal trajectory pertumbuhan GDP masing-masing negara yang disebut jadi gw belum punya argumen substantif juga.) But I'm not a fan of the graph they included in the appendix:


The second paper is an old paper by Mankiw, Romer, and Weir in QJE in 1992 (I just realized it's almost as old as me). First thought was: ah we covered this in first year macro. Second thought was, this is actually quite interesting and now I get a sense of how the Solow model contrasts with the endogenous growth theory. This must be why a lot of people are banging on human capital in general and population dividend for Indonesia in particular. (And saving? But I haven't really heard about saving-driven growth ...). This is part of the reading for my development class so I wonder if we're going to talk about human capital a lot.

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