Labour productivity, food security and nutrition driver: A CGE framework for Kenya

Estefania Custodio, Sofia Jimenez Calvo, Maria Priscila Ramos, Martina Sartori and Emanuele Ferrari

No 2025-06, JRC Working Papers on Economic Analysis of Policies for Africa from Joint Research Centre

Abstract: "Hunger and malnutrition remain significant challenges in Kenya, affecting labour productivity and economic performance. This work integrates the effect of key micronutrients (haem iron, zinc, and vitamins A RAE and B2) on labour productivity into the DEMETRA single-country dynamic CGE model for Kenya. Aligned with the recent national plans, it simulates a national policy promoting better nutrition by introducing subsidies for healthy foods like fruits, vegetables, fish, and dairy. Preliminary results suggest that building the dynamic baseline micronutrients intakes contribute positively to improve labour productivity in all regions in Kenya; however, disparities of impacts appear across regions due to their differences in the current food security and nutrition conditions. A greater labour productivity is then reflected in an increase in GDP in the medium- and long-term due to micronutrients intake. The simulation of sale subsidies of healthy food commodities highlights the presence of two mechanisms over economic variables: an increase through micronutrients intakes but a decrease due to lower public budget for education and health expenditure that also impact on labour productivity and GDP. These results highlight the necessity to consider a comprehensive socio-economic cost-benefit analysis for each policy measure and further research into alternative strategies like food fortification and biofortification. Nutritional policies could serve as growth strategies by leveraging the hidden economic benefits of nutrient-rich diets."

Date: 2025-06
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Persistent link: https://EconPapers.repec.org/RePEc:ipt:eapoaf:202506

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