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Reading Report 1: Health Inequality and Economic Development: Evidence from

Developing Countries

1. The Question to Be Investigated and Why It Is Meaningful

The paper investigates the relationship between health inequality and economic development
in developing countries. Specifically, it explores how income inequality within a country
influences health disparities and the role of economic development in mitigating or
exacerbating these inequalities. This topic is significant because understanding the dynamics
between health inequality and economic development can guide policy-making aimed at
reducing health disparities, promoting social equity, and enhancing the effectiveness of health
interventions in resource-constrained environments.

2. The Assumptions of the Paper and Their Legitimacy

The paper assumes that economic development, as measured by GDP per capita, has a direct
impact on health outcomes and inequality. It further assumes that higher income inequality
exacerbates health disparities, with a negative relationship between the two. The legitimacy
of these assumptions is supported by previous studies in economics and health economics,
although the complex, multi-dimensional nature of both economic development and health
inequality makes it challenging to isolate their effects.

3. The Data Set Used in the Paper

The dataset used in this paper consists of panel data from a sample of developing countries.
The data spans multiple years and includes variables such as GDP per capita, health
inequality indices (e.g., Gini coefficient for health), life expectancy, literacy rates, and health
expenditure. These variables are sourced from international organizations like the World
Bank, the World Health Organization (WHO), and the United Nations (UN).

4. The Theoretic Model

The theoretical model in the paper builds on the health-capital framework, which posits that
health is an important component of human capital, influencing both individual productivity
and broader economic development. It integrates elements of the health inequality literature
by highlighting the role of income distribution in shaping health outcomes.
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5. The Empirical Method

The empirical strategy used in the paper is based on panel data regression techniques,
specifically fixed-effects and random-effects models, to control for unobserved heterogeneity
across countries. The models estimate the impact of economic development (GDP per capita)
on health inequality, with controls for factors such as education, healthcare spending, and
governance quality. Instrumental variables (IV) methods are also employed to address
potential endogeneity issues.

6. Summary of Results

The empirical results confirm a non-linear relationship between economic development and
health inequality. The study finds that in lower-income countries, economic growth tends to
reduce health inequalities by improving access to healthcare and raising living standards.
However, in higher-income countries, the relationship reverses, with further economic
development increasing health inequality, primarily due to greater income disparities. These
findings are consistent with the hypothesis that economic growth alone is insufficient to
address health inequalities unless accompanied by policies that ensure equitable access to
health services and opportunities for all segments of the population.

7. The Contribution and Limitations of the Paper and Possible Extensions

The paper's contribution lies in its ability to empirically demonstrate the complex, non-linear
relationship between economic development and health inequality in developing countries. It
highlights the importance of considering income inequality as a determinant of health
disparities, which has been less emphasized in the literature. The study’s limitations include
the use of GDP per capita as the sole measure of economic development, potentially
overlooking other dimensions of development such as social capital, environmental factors,
or political stability. Additionally, the cross-country data may mask important within-country
heterogeneity. Future extensions of the study could explore the role of specific policies, such
as progressive taxation or targeted health interventions, in moderating the effects of economic
growth on health inequality.

8. Publication Information

Journal: Journal of Health Economics, Volume: 39, Year: 2015

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Reading Report 2: The Impact of Public Health Expenditure on Child Mortality:

Evidence from Sub-Saharan Africa

1. The Question to Be Investigated and Why It Is Meaningful

The paper investigates the impact of public health expenditure on child mortality in Sub-
Saharan Africa. It aims to understand whether increasing public spending on health can
significantly reduce child mortality rates in a region with high health challenges. This
question is important because child mortality is a key indicator of a country’s health system
effectiveness and overall development. Additionally, the role of public health expenditure is
central to policy debates on how best to allocate resources to improve health outcomes,
especially in developing regions with limited budgets.

2. The Assumptions of the Paper and Their Legitimacy

The paper assumes that public health expenditure has a direct and causal effect on reducing
child mortality. This assumption is based on the premise that increased investment in
healthcare services, such as immunizations, maternal care, and general healthcare
infrastructure, leads to improved health outcomes.

3. The Data Set Used in the Paper

The dataset used in this study consists of panel data from 45 Sub-Saharan African countries
spanning the years 1995 to 2012. The data includes child mortality rates (measured as the
under-5 mortality rate), public health expenditure as a percentage of GDP, GDP per capita,
education levels, and other control variables such as access to clean water and sanitation,
maternal literacy rates, and government stability. The data is sourced from international
organizations, such as the World Bank, the World Health Organization (WHO), and
UNICEF. The panel structure allows for both cross-country comparisons and within-country
time-series analysis.

4. The Theoretic Model

The theoretical model in the paper is based on the human capital framework, which suggests
that public investment in health not only improves health outcomes but also contributes to
long-term economic growth. The model assumes that child mortality is influenced by various
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factors, including healthcare infrastructure, maternal education, and income levels, with
public health expenditure playing a central role in mitigating mortality risks.

5. The Empirical Method

To address potential endogeneity concerns (e.g., reverse causality, where lower mortality
might lead to higher spending), the paper uses instrumental variable (IV) techniques. The
authors identify instruments like foreign aid for health and historical disease burdens, which
are assumed to be correlated with health expenditure but not directly with child mortality
outcomes.

6. Summary of Results

The empirical results show that public health expenditure has a significant negative effect on
child mortality in Sub-Saharan Africa, meaning that higher spending on health services is
associated with lower rates of child mortality. The estimates suggest that a 1% increase in
public health expenditure as a percentage of GDP is associated with a reduction of
approximately 0.5-1 child deaths per 1,000 live births. The results are robust to various model
specifications, including different lag structures and alternative control variables. The paper
also finds that the effect of health expenditure is stronger in countries with higher income
levels and better governance, indicating that the efficiency of health spending is influenced
by the broader economic and institutional context.

7. The Contribution and Limitations of the Paper and Possible Extensions

The paper contributes to the literature by providing empirical evidence of the significant role
that public health expenditure plays in reducing child mortality in Sub-Saharan Africa, a
region that faces considerable health challenges. The study’s findings are important for
policymakers seeking to allocate resources effectively to improve child health outcomes.
However, the paper has some limitations. One limitation is the potential measurement error in
public health expenditure data, as some countries may underreport or misclassify their health
spending..

8. Publication Information

Journal: World Development, Volume: 78, Year: 2016

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Reading Report 3: Economic Shocks, Health Outcomes, and Education: Evidence from
East Asia

1. The Question to Be Investigated and Why It Is Meaningful

This paper investigates the effects of economic shocks on health outcomes and education in
East Asia, focusing on how sudden economic downturns, such as the Asian financial crisis of
1997, impact individuals' health and educational attainment. This question is meaningful
because it provides valuable insights into the broader social impacts of economic shocks,
which are critical for designing policies that mitigate negative outcomes in both health and
education, two key pillars of human capital development.

2. The Assumptions of the Paper and Their Legitimacy

The paper assumes that economic shocks, specifically large-scale recessions or financial
crises, directly impact individuals' health and educational outcomes through several channels,
including changes in household income, access to healthcare, and social services. The
assumptions are generally legitimate, as economic theory suggests that recessions can lead to
adverse health outcomes through increased poverty and decreased access to healthcare
services.

3. The Data Set Used in the Paper

The dataset used in this paper is based on individual-level data from several East Asian
countries, including South Korea, Thailand, and Indonesia. The authors use longitudinal
household survey data collected from the late 1990s through the 2000s, capturing both the
pre-crisis and post-crisis periods. Key variables in the dataset include individual health
outcomes, educational attainment, household income, and public health expenditures. The
data is supplemented by macroeconomic indicators such as GDP growth, inflation rates, and
unemployment rates to account for the broader economic context.

4. The Theoretic Model

The theoretical model in the paper is based on a life-cycle approach to human capital
investment, which considers how economic shocks affect both short-term and long-term
investments in health and education. The model suggests that economic downturns reduce
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household income, leading to decreased investment in both health (e.g., nutrition, medical
care) and education (e.g., school attendance, educational expenditures).

5. The Empirical Method

The empirical analysis employs a difference-in-differences (DiD) approach, comparing the

pre- and post-crisis outcomes for individuals in countries that experienced major economic
shocks (e.g., the 1997 Asian financial crisis) with those in countries that did not face such
shocks. The authors also use propensity score matching (PSM) to create a control group of
individuals who did not experience the shock but share similar characteristics with those who
did, further improving the robustness of their findings. The empirical model controls for a
range of covariates, such as age, gender, household income, and education level, to account
for potential confounding variables.

6. Summary of Results

The empirical results show that economic shocks, particularly the Asian financial crisis, had
significant negative effects on both health and educational outcomes in the affected countries.
Health outcomes deteriorated, with increases in self-reported illness and mortality rates,
especially in lower-income households. The paper finds that individuals who were in school
during the crisis were more likely to drop out, and the education attainment of younger
cohorts was lower compared to those who were unaffected by the crisis.

7. The Contribution and Limitations of the Paper and Possible Extensions

The contribution of this paper lies in its comprehensive analysis of the multi-dimensional
impacts of economic shocks, specifically focusing on the intertwined effects on health and
education in East Asia. By using individual-level longitudinal data and sophisticated
econometric methods, the study provides robust evidence of the adverse effects of economic
recessions on human capital development in developing countries. The main limitation of the
paper is its reliance on data from only a few East Asian countries, which may limit the
generalizability of the results to other regions.

8. Publication Information

Journal: American Economic Journal: Applied Economics, Volume: 9, Issue: 1, Year: 2017