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Aggregate Income Shocks and Infant Mortality in the Developing World

Listed author(s):
  • Sarah Baird


    (Center for Global Health/Institute for International Economic Policy, George Washington University)

  • Jed Friedman


  • Norbert Schady


    (World Bank)

Health and income are strongly correlated both within and across countries, yet the extent to which improvements in income have a causal effect on health status remains controversial. We revisit this question with an investigation of short-term fluctuations in aggregate income and infant mortality using an unusually large dataset of 59 developing countries, covering over 1.7 million births. Our focus is on the effect of departures of income from trend on infant mortality, rather than on the relationship between long-term changes in income and infant mortality. Given that we use unit data, rather than country averages, we can control for the changing composition of women giving birth, and assess how aggregate income shocks interact with a variety of characteristics of mothers and children, such as mothers education and the gender of the child. We show that there is a large, negative association between per capita GDP and infant mortalityon average, a one percent decrease in per capita GDP is associated with an increase in mortality of between 0.24 and 0.40 infants per 1,000 children born. Female infant mortality is more sensitive than male infant mortality to economic fluctuations, especially during negative shocks to GDP, suggesting that policies that protect the health status of female infants may be especially important during economic downturns in much of the developing world.

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Paper provided by The George Washington University, Institute for International Economic Policy in its series Working Papers with number 2010-07.

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Length: 27 pages
Date of creation: Jul 2009
Publication status: Published in The Review of Economics and Statistics, August 2010
Handle: RePEc:gwi:wpaper:2010-07
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  1. Baird, Sarah & Friedman, Jed & Schady, Norbert, 2007. "Infant mortality over the business cycle in the developing world," Policy Research Working Paper Series 4346, The World Bank.
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