We examine the effects of water microdams and ensuing waterborne diseases on household decisions in Tigray, Ethiopia, where the government implemented a water resource development programme two decades ago. We find microdams increase productivity of both fuelwood collection and crop production, but the costs of these dams to households can be significant. In villages close to dams, disease prevalence is higher and all household labour categories spend more time sick, and more time is spent by male and female adults caring for sick family members. These can cost the household anywhere in the region of 150-250 Birr per season, depending on the type of labour diversion and the productivity of labour. Males are most significant here. Removing their time from production results in 40-60 per cent higher productivity and income losses compared to diversion of female labour. Sick households also spend significantly more money on health care, especially when male and female adults are sick.