Health and Economic Development - Evidence from the Introduction of Public Health Care

This paper investigates the causal effect of changes in health on economic development using a long panel of European countries. Identification is based on the particular timing of the introduction of public health care systems in different countries, which is the random outcome of a political process. We document that the introduction of public health care systems had a significant immediate effect on the dynamics of infant mortality and crude death rates. The findings suggest that a reduction in infant mortality or crude death rates exhibited a positive effect on growth in income per capita and increased population growth.