Schooling, Child Labor, and the Returns to Healthcare in Tanzania

We study the effects of accessing better healthcare on the schooling and labor supply decisions of sick children in Tanzania. Using variation in the cost of formal-sector healthcare to predict treatment choice, we show that accessing better healthcare decreases length of illness and changes children’s allocation of time to school and work. Children attend school for more days per week—but not for more hours per day—as a result of accessing better healthcare. There are no significant effects on child labor, but the results suggest that time spent in physically strenuous activities such as farming and herding increases.