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The Mortality Trade-off in Local Oil Booms: Production Capacity vs Price Windfalls in Colombia

Author

Listed:
  • Carlos H. Cubillos

    (Pontificia Universidad Javeriana.)

  • Richard Jaimes

    (Pontificia Universidad Javeriana.)

Abstract

This paper documents that local oil booms in Colombia affect residence-based mortality through two distinct economic channels with opposite signs and through different cause-of-death components. A one-standard-deviation increase in municipal oil production lowers total mortality by 2.1 deaths per 100,000 inhabitants, concentrated in non-transmissible disease. A one-standard-deviation increase in price-weighted exposure raises total mortality by 4.2 deaths per 100,000, concentrated in non-transmissible disease and external (non-suicide) causes. The mechanism is institutional: only sustained production formalizes labor and shifts households from the subsidized to the contributory health insurance regime, while price windfalls raise municipal revenue by comparable magnitudes but leave the formal-sector margin untouched. The 2010–2014 boom is dominated by the production channel; the 2015–2020 bust by the dissolution of the price windfall, which accounts for an aggregate reduction of approximately 2,300 deaths in the producer subsample.

Suggested Citation

  • Carlos H. Cubillos & Richard Jaimes, 2026. "The Mortality Trade-off in Local Oil Booms: Production Capacity vs Price Windfalls in Colombia," Vniversitas Económica, Universidad Javeriana - Bogotá, vol. 26(2), pages 1-42, May.
    • Handle: RePEc:col:000416:023135
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    JEL classification:

    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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