THE GOVERNMENTS OF LATIN AMERICA, HAVING BEEN PREOCCUPIED MAINLY with industrialization since World War II, began to give more attention to social development during the Sixties. Priorities of development policy, stressed under the Alliance for Progress, now include education and health; improvements in both areas are regarded as means of raising output as well as furthering social progress. Analyses of Latin America's human resources, however, have concentrated mainly on manpower requirements and corresponding educational needs. They have been supported by evidence of high returns to investment in education,2 while studies of the region's health conditions have yielded no comparable evidence in support of health sector investments. Health improvements are evident, but economic analysis has not yet shown to what extent they are attributable to health expenditures alone. Poor health is closely associated with poverty, low education, and rural residence, but causal relationships among these and other variables remain largely unexplored.