Small businesses are everywhere in Durban, South Africa -- "tuck shops" that sell flour, sugar and other items; seamstresses; auto body shops; brick fabricators; bars and restaurants that seat a handful of people.
"If you knock on doors and ask [people] if they have an income-generating business, they'll say, 'Yes, I make garments in my house,'" says Li-Wei Chao, a research associate at the University of Pennsylvania's Population Studies Center, who lives in South Africa.
While it's estimated that these businesses contribute almost 50% of South Africa's total employment and 30% of its gross domestic product, the impact of poor health, and in particular HIV/AIDS, on these enterprises has been largely overlooked by researchers. Measurements of the economic toll of disease tend to focus on the formal economy -- larger, established businesses -- rather than on the informal sector, with its many owner-worker enterprises and businesses that often have just a few employees.
But Chao, Wharton professor of health care systems Mark V. Pauly and others are attempting to fill that gap with a new study that examines the impact of poor health on micro and small enterprises in the Durban area. After conducting health surveys of small business owners and then tracking their businesses between 2002 and 2004, the researchers found that "poor baseline health and declines in health over time are both significantly associated with subsequent business closure." Their study, titled "Poor Health Kills Small Businesses: Illness and Microenterprises in South Africa," was published in the March/April edition of the journal Health Affairs.
The co-authors who worked with Chao and Pauly on the study include Helena Szrek and Nuno Sousa Pereira from the University of Porto in Portugal, Frances Bundred from ECI-Africa in South Africa, Catherine Cross from the Human Sciences Research Council in South Africa, and Jeff Gow, a professor at the University of New England in Australia.
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