Can recessions have permanent effects on people’s health in developing countries? This column looks at infant mortality in India and finds that recessions make things worse. The paradox is that this is often because women are working more, which in isolation is something to be welcomed. It calls for a balance to be struck between empowering mothers and protecting the most vulnerable.
Infant mortality continues to be much higher in the developing world than is necessary given that most deaths can be averted at low cost. The fact that low cost interventions can make such a large difference casts some doubt on the relevance of income. Since most infant deaths occur on account of infectious disease, it is relevant to consider public health spending and the manner in which this varies with aggregate income, but there is also clearly a role for private incomes in combating the under-nutrition that makes children more vulnerable to infection. The rapid decline in infant mortality in today’s richer countries over the last century illustrates the potential for improvement. Today, roughly one in every three deaths in poor countries is the death of a child, compared with one in every hundred deaths in rich countries. “Excess” childhood mortality in poor countries explains most of the life expectancy gap between rich and poor countries today, which is close to thirty years.
Poverty and infant mortality
It is difficult to identify the relationship between income growth and infant mortality over long periods of time because other factors such as technology and education tend to evolve alongside income. It is easier to isolate this relationship by comparing upturns and downturns in the economy. I did this using state-level income variation in India matched to individual data on mortality. India accounts for a quarter of child deaths worldwide. Between 1970 and 1997, the risk of infant death was 1 in 20 in urban areas and 1 in 10 in rural areas.
Conventional wisdom suggests that income growth will lead to lower mortality rates. An increase in average household incomes will tend to lead to improvements in diet and other health inputs. This may be reinforced by government health spending if this also rises in good times.
But the evidence questions the convention wisdom. Mortality risks for adults and children in developed countries are lower during recessions (Ruhm 2000, Dehejia and Lleras-Muney 2004), and the historical evidence suggests that improvements in medical technology, public services, and education were more important than income growth in bringing about a sustained declines in mortality (Deaton 2006).
New data, new methods
I revisit this question using new data and new methods. In my research I use the fact that often one sibling is born during a recession and not another, implementing methods that effectively compare their risks of dying in the first year of life, holding other influences constant. By comparing children born at different times to the same mother, I mitigate the problem that women who give birth during a recession may be different from women who give birth at other times in ways that are related to the risk of child death. The analysis uses household survey data for more than 152,000 children born to around 50,000 mothers in 15 states in India between 1970 and 1997.
By virtue of analysing children born across several years and several states, I am able to control for the effects of unmeasured trended variables such as technology that may influence both mortality and income. I can also control for the effects of relevant regional characteristics that evolve sluggishly over time, such as culture and climate. I control for rainfall variation as this may directly affect income through agricultural production and directly affect mortality by changing the risk of disease.
Infant mortality and recessions
The results show that recessions increase infant mortality in rural areas. A “typical” (median sized) downturn in a single year is estimated to undo almost half of the total annual decline in mortality in India in 1970–1999. The effects of recessions are not evenly distributed. The most vulnerable households are those in which the mother is uneducated or had her first birth when she was a teenager. Within households, girls are much more likely to die in a downturn than their brothers, reinforcing previous findings that in lean times it is girls who suffer most.
I find that antenatal care, attended births, child vaccinations and the probability of treatment for infectious diseases among children are lower in downturns. This is consistent with lower earnings in a downturn, but I show that it is also because mothers work harder and do not have as much time to seek healthcare. Households use maternal labour supply (especially in agricultural households) as an insurance mechanism but this is a means of insurance that appears to be harmful to the health of their children. These results contrast with those for richer countries, where women work more in upturns, contributing to higher infant mortality rates during upturns (Dehejia and Lleras-Muney 2004).
In richer countries, when aggregate income falls, government social spending rises so as to buffer individuals. In poor countries this is not the case. We show that in India, health spending declines in recessions, and that this makes matters worse.
Recessions are frequent and severe in India. The average drop in income during economic downturns in the period 1970-1997 was 4.4%; in upturns, the rise was 6.2% and India has a stable economy relative to some other developing countries. Our results underline the importance of considering the welfare implications of income volatility in addition to the implications flowing from low average levels of income.
Shielding the vulnerable
My findings suggest the need for policies to shield the vulnerable from temporary falls in wages or increases in unemployment with irreversible consequences. In addition to expanding safety nets such as the public food distribution system already in place in India, governments need to work at maintaining the provision of social services during downturns. Interventions that reduce poverty by raising wages, stabilising incomes and encouraging mothers to work and save in good times all have the potential to improve child survival.
- Bhalotra, S (2010), `Fatal Fluctuations? Cyclicality in Infant Mortality in India’, Journal of Development Economics 93 (2010) 7–19
- Dehejia, R and A Lleras-Muney (2004), ‘Booms, Busts, and Babies´ Health’, Quarterly Journal of Economics, 119(3):1091-1130.
- Ruhm, C (2000), ‘Are Recessions Good for your Health?’, Quarterly Journal of Economics, 115(2):617-650.