Impact of a TB epidemic on worker and firm productivity: the regional perspective from Ukraine

This paper investigates the indirect economic effects of tuberculosis (TB) in a high TB burden country, focusing on worker and firm productivity. Using unique administrative data from Ukraine, in 2003-2009, we find that TB prevalence leads to significantly lower wages and total factor productivity (TFP), while higher TB incidence, reflecting risk of exposure, is linked to higher wages and productivity. Additional analysis reveals strong spatial spillovers, underlining the contagious nature of the disease and the need for coordinated policy responses. Our estimates suggest that a 10% reduction in TB prevalence could yield a 1.05% GDP gain (0.15% from higher wages and 0.89% from higher TFP), compared to TB-related spending of only 0.04% of GDP that same year. These findings highlight the underinvestment in TB control and the broader economic stakes of epidemic containment.