Wealthier is healthier

With cross-country, time series data on health (infant and child mortality, and life expectancy) and per capita income, the authors estimate the effect of income on health. They use instrumental variables estimation to identify the effect of income on health that is structural and causal, isolated from reverse causation (healthier workers are more productive and hence wealthier) or incidental association (some other factor may cause both better health and greater wealth). The long-run income elasticity of infant and child mortality in developing countries lies between 0.2 and 0.4. Using those estimates, they calculate that in 1990 alone, more than half a million child deaths in the developing world could be attributed to poor economic performance in the 1980s.