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Essays on Empirical Health Economics Essays on Empirical Health Economics Victor Hugo de Oliveira Silva Universidad de Alicante Departmento de Fundamentos del An´alisis Econ´omico Quantitative Economics Doctorate Date: June 13, 2013 I HEREBY RECOMMEND THAT THE THESIS PREPARED UNDER MY SUPERVISION BY Victor Hugo de Oliveira Silva ENTITLED Essays in Empirical Health Economics BE ACCEPTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY IN ECONOMICS Climent Quintana-Domeque Thesis Advisor Fernanda Brollo Thesis co-Advisor Essays in Empirical Health Economics By Victor Hugo de Oliveira Silva Dissertation Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy in Economics from the Departmento de Fundamentos del An´alisis Econ´omico at Universidad de Alicante, 2013 Alicante, Spain To my wife. v Acknowledgments I would first like to thank all those people who in some way have contributed directly or indirectly to my thesis. Nevertheless, certain individuals truly de- serve my words of appreciation. I am deeply grateful and indebted to my Thesis advisor, Professor Climent Quintana-Domeque. He introduced me to the fascinating world of applied research in Development Economics, through his fascinating courses taught with great ability and enthusiasm. The discussions regarding research ideas and his advice helped me along the right road towards being a better researcher. His great passion for applied studies in economics has now become mine as well. His support for this Thesis was crucial, and it is a pleasure to me to share with him the authorship of the first and second chapters. Climent, I am very proud to be the first student to have you as a mentor on a graduate program. However, I envy your future pupils as they will benefit from your even greater knowledge. I also would like to thank my co-advisor, Professor Fernanda Brollo, for her great support for the third chapter of my Thesis. Her excellent course on applied research in Political Economy greatly contributed to constructing this chapter. Moreover, she also shared with me not only her expertise on the subject, but also her database that was fundamental for this work. Therefore, I am really privileged to be sharing with her the authorship of the third chapter of my Thesis. vii I would also like to express my gratitude to faculty members and ex-members of the graduate program: Sonia Oreffice, Maria Dollores Collado, Maria Angeles Carnero, Juan Mora, Giovanni Ponti, Francesco Turino, Francesco Serti and Mariano Bosch. I must also thank the administrative staff Josefa Zaragoza, Cristina Ramirez, Lourdes Garrido and Marilo Rufete for their helpful support. I would like to express my appreciation of all my PhD colleagues. In particular, I should thank Maria Jose Monserratt, Serafima Chirkova, Nathan Carroll, and Alberto Basso for their support and boundless friendship. I will always remember all of you as the best friends that I could have wished for. I dedicate every word of my Thesis to my wife, Juliana Dantas. She has shown her strength and courage by choosing to follow me in my personal challenge in detriment of the comfort of her family. Her emotional support was fundamental to me, always encouraged even when things were difficult. This Thesis would not have been possible without her. I also dedicate my Thesis to my parents who made huge sacrifices to ensure that I and my sisters had prosperous lives. I am truly grateful for the friendship of Helder Jorge and how he has supported me and my wife during our stay in Alicante. Finally, I acknowledge financial support from the Instituto de Pesquisa e Es- trat´egia Econ^omica do Cear´a(IPECE). viii Essays in Empirical Health Economics Victor Hugo de Oliveira Silva Departmento de Fundamentos del An´alisis Econ´omico Universidad de Alicante Alicante, Spain 2013 ABSTRACT This thesis is divided into three empirical analyses on health economics in Brazil. The first chapter is a study of the relationship between the burden of disease and income in the year of birth and adult stature using cohort- state level data in Brazil. We find that GDP in the year of birth, not infant mortality rate, is a robust predictor of population stature in Brazil during the period 1950-1980. An increase in the real GDP per capita of the magnitude for that period explains the one third increase in adult height, or around 1 cm, occurring in the same time span. Our results are robust to control for cohort and region fixed effects, migration adjustments, alternative proxies for gross nutrition, and additional socioeconomic controls in the year of birth. Our results are consistent with income early in life (in the year of birth or early in childhood) determining adult human capital. Given the link between birth weight and adult height, our results echoes the recent findings on the impact of economic fluctuations on birth weight during the Argentine economic crisis of 2001-2002. The second chapter analyses the impact of a natural disaster on the health of the newborns in a developing country based on of the national registry of live births of Brazil and exploiting a completely unexpected event: Hurricane ix Catarina in 2004, the first-ever reported hurricane in the South Atlantic. Us- ing a difference-in-difference-in-difference design we find that the weight of newborns exposed to Hurricane Catarina in the first trimester of pregnancy is on average between 62 and 92 grams lower than that of their counterparts. In addition, when restricting our attention to most affected versus unaffected municipalities, we document that the Apgar score of newborns most-exposed to Hurricane Catarina in the first trimester of pregnancy is on average between 0.2 and 0.3 units lower than that of their counterparts. Finally, the third chapter provides evidence on the effects of windfall resources on development outcomes. We exploit the design of the revenue share mech- anism of the main resource fund transferred from the federal government to municipalities in Brazil, through the Fundo de Participa¸c~aodos Munic´ıpios (FPM). Under non-manipulative sorting of the running variable (i.e. the pop- ulation size), we show that several birth outcomes are sensitive to the avail- ability of extra money from the FPM. Such improvements in child health at birth can be explained by the rising of municipalities' revenue and expenditure due to extra money from the FPM. A potential channel is the improvements in health care services, where municipalities awarded with more FPM transfers invest more money in the health sector, and increase Family Health Program (PSF) coverage in their most vulnerable communities. x Contents I Introducci´on 1 II Chapters 19 1 Early-life Environment and the Stature of the Brazilian Adult Population . 21 1.1 Introduction............................. 21 1.2 Data................................. 24 1.3 The Evolution of Height, Income and Disease in Brazil . 26 1.4 Results................................ 28 1.5 Robustness Checks . 31 1.5.1 Migration . 31 1.5.2 Omitted relevant variables . 33 1.5.3 Nutrition and disease revisited: Income, mortality and their interactions . 36 1.6 Conclusion . 40 1.7 Appendix: Figures and Tables . 42 2 Natural Disasters and Birth Outcomes in Developing Coun- tries: Evidence from Hurricane Catarina in Brazil . 51 2.1 Introduction............................. 51 2.2 Data Sources, Hurricane Catarina and Identification Strategy . 55 2.2.1 The National Registry of Live Births of Brazil . 55 2.2.2 Child Health and Mother's Characteristics before the Hurricane . 58 2.2.3 Hurricane Catarina: the Aftermath . 60 2.2.4 Identification Strategy: in utero exposure to Hurricane Catarina........................... 61 xi 2.3 The Impacts of Hurricane Catarina . 63 2.3.1 Effects on Health Metrics of Newborns . 63 2.3.2 Effects on Observable Characteristics . 65 2.3.3 Effects on Health Metrics of Newborns conditional on Observable Characteristics . 67 2.4 Robustness Checks . 71 2.4.1 Excluding Preterm Newborns . 71 2.4.2 Excluding Additional Adjacent Municipalities . 72 2.5 Conclusion . 73 2.6 Appendix: Tables and Figures . 75 3 The Effects of Federal Transfers on Birth Outcomes: Evidence from Brazil . 91 3.1 Introduction............................. 91 3.2 The Fundo de Participa¸c~ao Municipal . 95 3.3 Data................................. 97 3.3.1 Data on Family Health Program . 99 3.3.2 Data on Corruption . 101 3.4 Identification Strategy . 102 3.5 Results and Robustness . 106 3.5.1 Validity Test of Fuzzy RD . 106 3.5.2 Effects of FPM Transfers on Birth Outcomes . 108 3.6 Mechanism Linking FPM Transfers to Birth Outcomes . 110 3.6.1 The Effects on Public Revenue and Expenditure . 110 3.6.2 The Effects on Family Health Care . 114 3.6.3 Does Corruption Matter? . 115 3.7 Conclusion . 118 3.8 Appendix: Figures and Tables . 120 Bibliography . 135 xii List of Figures 1.1 Time trend for adult stature by Brazilian Regions . 42 1.2 Time trend in IMR by Brazilian Regions . 42 1.3 Time trend in log(GDP) by Brazilian Regions . 43 2.1 Hurricane Catarina. Source: NOAA. 75 2.2 Affected Municipalities by degree of intensity. Source: Marcelino et al (2005). 75 2.3 Municipalities in treatment and control groups . 76 2.4 Municipalities in treatment and control groups . 77 2.5 Exposure in utero by month of birth in affected municipalities in2004................................ 77 2.6 Evolution of Average Apgar Score, 2003-2004, affected versus unaffected . 78 2.7 Evolution of Average Apgar Score, 2003-2004, Most affected versus unaffected . 78 3.1 Actual and Theoretical FPM Transfers . 120 3.2 Histograms of Population Size . 121 3.3 McCrary Test for Manipulation of Population Size . 122 3.4 ITT Jumps - Additional Controls .
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