[Paper Review] The wealth of nations and the health of populations: A quasi-experimental design of the impact of sovereign debt crises on child mortality

Adel Daoud|arXiv (Cornell University)|Dec 29, 2020

Employment and Welfare Studies38 references4 citations

TL;DR

This study uses a quasi-experimental design based on sovereign debt crises (SDCs) in 57 low- and middle-income countries (1990–2015) to assess causal effects on child mortality, leveraging 3 million birth history records from Demographic and Health Surveys. Using machine learning for causal inference, it finds that SDCs significantly increase child mortality from age one to four, with effects ranging from 12% to 14% (p < 0.05), while neonatal mortality shows no significant impact.

ABSTRACT

The wealth of nations and the health of populations are intimately strongly associated, yet the extent to which economic prosperity (GDP per capita) causes improved health remains disputed. The purpose of this article is to analyze the impact of sovereign debt crises (SDC) on child mortality, using a sample of 57 low- and middle-income countries surveyed by the Demographic and Health Survey between the years 1990 and 2015. These surveys supply 229 household data and containing about 3 million childbirth history records. This focus on SDC instead of GDP provides a quasi-experimental moment in which the influence of unobserved confounding is less than a moment analyzing the normal fluctuations of GDP. This study measures child mortality at six thresholds: neonatal, under-one (infant), under-two, under-three, under-four, and under-five mortality. Using a machine-learning (ML) model for causal inference, this study finds that while an SDC causes an adverse yet statistically insignificant effect on neonatal mortality, all other child mortality group samples are adversely affected between a probability of 0.12 to 0.14 (all statistically significant at the 95-percent threshold). Through this ML, this study also finds that the most important treatment heterogeneity moderator, in the entire adjustment set, is whether a child is born in a low-income country.

Motivation & Objective

• To examine whether economic downturns linked to sovereign debt crises (SDCs) causally affect child mortality in low- and middle-income countries.
• To address the limitations of correlational studies by using SDCs as a quasi-experimental shock to isolate causal effects.
• To assess differential impacts across child age groups (neonatal, infant, and under-five mortality).
• To identify key moderators of treatment heterogeneity, particularly country income level.
• To improve causal inference in health economics by applying machine learning to large-scale survey data.

Proposed method

• Utilizes a quasi-experimental design by treating sovereign debt crises (SDCs) as natural experiments to reduce confounding from unobserved time-invariant factors.
• Analyzes data from 57 low- and middle-income countries using 229 household surveys containing approximately 3 million childbirth history records (1990–2015).
• Measures child mortality across six thresholds: neonatal, under-one, under-two, under-three, under-four, and under-five.
• Applies machine learning (ML) models for causal inference to estimate average treatment effects and identify treatment heterogeneity.
• Employs a robust adjustment set including country, year, and survey-specific fixed effects to control for confounders.
• Identifies the most important moderator of treatment heterogeneity as whether the child was born in a low-income country.

Experimental results

Research questions

• RQ1 Does a sovereign debt crisis have a statistically significant causal effect on child mortality in low- and middle-income countries?
• RQ2 Are the effects of sovereign debt crises on child mortality uniform across different age groups of children?
• RQ3 Which factors moderate the impact of sovereign debt crises on child mortality, particularly in terms of country-level characteristics?
• RQ4 Is the relationship between national economic stress and child health driven by unobserved confounders, or can it be causally attributed to SDCs?
• RQ5 How does the effect of SDCs on child mortality vary between low-income and other middle-income countries?

Key findings

• Sovereign debt crises have a statistically significant adverse effect on child mortality for all age groups except neonatal, with effects ranging from 12% to 14% (p < 0.05).
• The impact on under-five mortality is particularly pronounced, with a 14% increase in mortality risk following an SDC, holding all else constant.
• Neonatal mortality shows no statistically significant change following an SDC, suggesting that early-life health is less affected by macroeconomic shocks.
• The most important moderator of treatment heterogeneity is whether a child is born in a low-income country, indicating greater vulnerability in these settings.
• The machine learning model identifies country income level as the dominant factor shaping differential responses to SDCs, highlighting structural inequalities in health resilience.
• The study’s causal estimates are robust to multiple sensitivity checks, supporting the validity of the quasi-experimental design.