Poor health kills small business: illness and microenterprises in South Africa

Abstract

Small businesses contribute almost 50 percent of total employment and 30 percent of gross domestic product in South Africa, but the impact of poor health and AIDS on these businesses is poorly documented. Using three waves of longitudinal data from predominantly African neighborhoods in peri-urban Durban, South Africa, this project investigates the connections between the health of the owner of a micro- and small enterprise (MSE) and the MSE's growth, survival, or exit. The results show that poor baseline health and declines in health over time are both significantly associated with subsequent business closure.