Latin America is one of the most unequal regions in the world, with the richest 10% capturing 54% of national incomes. Racial disparities further compound this inequality, as white individuals earn at least twice as much as those with darker skin tones. One underappreciated contributor to these disparities is Chagas disease, a neglected tropical disease that afflicts 8 million people in Latin America, with another 75 million at risk of exposure. Chagas is spread primarily by triatomine bugs, which thrive in substandard housing conditions. The disease can cause chronic heart problems, leading to long-term health deterioration that reduces labor force participation and reinforces cycles of poverty.
In this paper, the authors examine the impacts of combatting Chagas on economic inequality, the intergenerational transmission of poverty, and burdens on healthcare systems. They do so in the context of Brazil’s post-1983 campaign to eliminate Chagas disease transmission through vector control. The authors exploit geographic variation in exposure to Chagas disease prior to the intervention, comparing municipalities that were previously infested with those that were never exposed. They find the following:
- Municipalities that received vector control interventions saw an 11.1% increase in GDP per capita relative to those that were never exposed to Chagas disease. Income inequality, as measured by the Gini coefficient: a measure of income inequality, where 0 represents perfect equality and 1 (or 100%) represents maximum inequality , declined by 1.1% in treated municipalities, indicating that the intervention contributed to greater economic equity.
- Exposure to Chagas disease control in childhood led to higher adult incomes for non-white Brazilians, accelerating racial income convergence. The share of non-white adults earning above the national median increased by 1.4 percentage points (2.8%), while there was no significant change among white adults. Labor force participation among non-white adults from treatment municipalities increased by 0.9 percentage points (1.3%), suggesting that improved long-term health played a key role in these economic gains.
- The children of non-white men from treated municipalities had a 0.44 percentage point (0.46%) increase in literacy rates, signaling that the intervention helped break cycles of intergenerational poverty.
- Hospitalizations due to circulatory system diseases (a common long-term consequence of Chagas) decreased by 19% in treated areas compared to other causes. Public spending on hospital care for circulatory diseases declined by 16%, relieving strain on Brazil’s universal healthcare system.
- The benefits of Chagas disease control are high compared to their costs. The internal rate of return (IRR): the discount rate at which the net present value of an investment is zero, indicating its profitability for the intervention, even excluding unmeasured health benefits, was 23.9%, demonstrating strong economic justification for disease control. The marginal value of public funds (MVPF): a term coined by Nathaniel Hendren and Ben Sprung-Keyser in their 2020 paper “A Unified Welfare Analysis of Government Policies,” the benefit that a policy provides its recipients divided by its net cost was infinite, meaning the government recovered its costs entirely through hospital savings alone.
- Eliminating Chagas disease transmission across Latin America could increase regional GDP per capita by 1.5% and reduce Gini coefficients by 0.15%. Notably, greater benefits would accrue to countries in the region with higher shares exposed to Chagas disease, which are precisely the countries that are more underdeveloped and unequal today.
These findings provide a more comprehensive understanding of the economic benefits of controlling neglected tropical diseases in developing countries, most of which can be effectively managed through environmental interventions like the campaign examined in this study. While the results presented here specifically pertain to Chagas disease, which is unique to the Americas, the broader implications for other diseases remain an open question for future research. Nevertheless, this study highlights new pathways through which health improvements can drive inclusive economic growth, reinforcing the case for investing in disease control—not only for Chagas, which affects many millions of people—but also for other diseases that contribute to chronic health burdens among the world’s poorest populations.