For Health, Strength, and Daily Food: The Dual Impact of Remittances and Public Health Expenditure on Household Health Spending and Child Health Outcomes

Abstract

Child and infant mortality in developing countries decreased 33.5 per cent and 30.9 per cent, respectively, during 1995–2009, while remittances and public health spending more than doubled. I examine how remittances and government health spending improve these child health outcomes. Neither government health spending nor remittances causally affect household health spending. Public health spending has an insignificant negative impact on mortality. The increase in remittances causally accounts for 32 per cent and 37 per cent of the decline in child and infant mortality, respectively. Remittances reduce mortality through improved living standards from the relaxation of households’ budget constraints.

Acknowledgements

I am deeply grateful to Susan Wolcott, Alfonso Flores-Lagunes, Bong Joon Yoon, and the participants in the departmental seminar in the Department of Economics at the State University of New York (SUNY) at Binghamton for valuable comments and suggestions. I am also grateful to Shawn Kantor in the Department of Economics at Rensselaer Polytechnic Institute for valuable suggestions. I also thank two anonymous referees for their valuable comments and suggested revisions. The data set and codes are available upon request from the author.