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Spending to Save? State Health Expenditure and Infant Mortality in India

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  • Sonia Bhalotra

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Abstract

There are severe inequalities in health in the world, poor health being concentrated amongst poor people in poor countries. Poor countries spend a much smaller share of national income on health expenditure than do richer countries. What potential lies in political or growth processes that raise this share? This depends upon how effective government health spending in developing countries is. Existing research presents little evidence of an impact on childhood mortality. Using specifications similar to those in the existing literature, this paper finds a similar result for India, which is that state health spending saves no lives. However, upon allowing lagged effects, controlling in a flexible way for trended unobservables and restricting the sample to rural households, a significant effect of health expenditure on infant mortality emerges, the long run elasticity being about -0.24. There are striking differences in the impact by social group. Slicing the data by gender, birth-order, religion, maternal and paternal education and maternal age at birth, I find the weakest effects in the most vulnerable groups (with the exception of a large effect for scheduled tribes).

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Bibliographic Info

Paper provided by Department of Economics, University of Bristol, UK in its series The Centre for Market and Public Organisation with number 07/169.

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Length: 19 pages
Date of creation: Aug 2007
Date of revision:
Handle: RePEc:bri:cmpowp:07/169

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Keywords: public spending; health; poverty; infant mortality; India;

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  1. Filmer, Deon & Hammer, Jeffrey S & Pritchett, Lant H, 2000. "Weak Links in the Chain: A Diagnosis of Health Policy in Poor Countries," World Bank Research Observer, World Bank Group, vol. 15(2), pages 199-224, August.
  2. Sonia Bhalotra & Arthur van Soest, 2007. "Birth Spacing, Fertility and Neonatal Mortality in India:Dynamics, Frailty and Fecundity," The Centre for Market and Public Organisation 07/168, Department of Economics, University of Bristol, UK.
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Citations

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Cited by:
  1. Nizalova, Olena Y. & Vyshnya, Maria, 2009. "Evaluation of the Impact of the Mother and Infant Health Project in Ukraine," IZA Discussion Papers 4593, Institute for the Study of Labor (IZA).
  2. Mansour Farahani & S. V. Subramanian & David Canning, 2009. "Effects of state-level public spending on health on the mortality probability in India," PGDA Working Papers 5009, Program on the Global Demography of Aging.
  3. Bhalotra, Sonia R. & Clots-Figueras, Irma, 2011. "Health and the Political Agency of Women," IZA Discussion Papers 6216, Institute for the Study of Labor (IZA).
  4. Casabonne, Ursula & Kenny, Charles, 2012. "The Best Things in Life are (Nearly) Free: Technology, Knowledge, and Global Health," World Development, Elsevier, vol. 40(1), pages 21-35.
  5. Bhalotra, Sonia R., 2007. "Fatal Fluctuations? Cyclicality in Infant Mortality in India," IZA Discussion Papers 3086, Institute for the Study of Labor (IZA).
  6. Kaushal, Kaushalendra Kumar & F Ram, Faujdar Ram & Abhishek, Abhishek Singh, 2013. "Public Spending on Health and Childhood Mortality in India," MPRA Paper 48680, University Library of Munich, Germany.
  7. Kruse, Ioana & Pradhan, Menno & Sparrow, Robert, 2012. "Marginal benefit incidence of public health spending: Evidence from Indonesian sub-national data," Journal of Health Economics, Elsevier, vol. 31(1), pages 147-157.
  8. Nilgun Yavuz & Veli Yilanci & Zehra Ozturk, 2013. "Is health care a luxury or a necessity or both? Evidence from Turkey," The European Journal of Health Economics, Springer, vol. 14(1), pages 5-10, February.

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