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The Economics and Finance Letters

June 2021, Volume 8, 1, pp 70-81

Income Shocks and Child Mortality Rates: Evidence from Fluctuations in Oil Prices

Catalina Rivero

,

Pedro Acuna

Catalina Rivero 1 ,

Pedro Acuna 1 
  1. Department of Economics, University of Buenos Aires, Argentina. 1

Pages: 70-81

DOI: 10.18488/journal.29.2021.81.70.81

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Article History:

Received: 15 January, 2021
Revised: 08 February, 2021
Accepted: 04 March, 2021
Published: 19 March, 2021


Abstract:

Previous studies show that children in lower socioeconomic status families reveal higher rates of mortality. We complement the income-mortality literature by establishing a causal link between income and child mortality. Our instrument for income is based on time-series global shocks to oil prices combined with the cross-sectional share of employment in manufacturing across US states as their exposure to oil price changes. Using the universe of death records between the years 1975-2004, we find the OLS results of income-child-mortality relationships are under-biased. The 2SLS-IV results suggest that a $1,000 increase in income per capita at the state level reduces child mortality and infant mortality by 0.87 and 0.53 fewer incidences per 1,000 population of age-specific children.
Contribution/ Originality
This is the first study to establish a causal link between income and child mortality rate. Moreover, it adds to the literature on oil and income by introducing an oil-price-based instrument which has the potential to influence household income and health.

Keywords:

Income, Child mortality, Infant mortality, Toddler mortality, Income inequality, oil price, Panel data, Two-Stage least square, Instrumental variable.

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Funding:

This study received no specific financial support.

Competing Interests:

The authors declare that they have no competing interests.

Acknowledgement:

Both authors contributed equally to the conception and design of the study.

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