Sickness should make individuals less productive, but there are problems in measuring this effect. First, how is adult morbidity measured in a household survey? Second, how is the impact of morbidity on productivity inferred, if earning is partly used to improve health? Self-reported functional activity limitation due to illness is considered as an indicator of morbidity for wage earners and self employed. To deal with both the measurement and joint determination problems, an instrumental variable estimation approach is used where local food prices and health services instrument for disability days that reduce wages by at least 10 percent and hours by 3 of more percent.
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