SCI Project Showcase Series: Does Increasing Public Spending in Health Improve Health?

Longer Description

We examine the link between public spending in health and health outcomes by leveraging
differential exposure to a health spending reform prompted by Brazil’s 29 th Constitutional
Amendment, which mandated municipalities to spend at least 15% of their budget on health.
We map dynamic effects on health care spending, inputs, access, outputs and outcomes. For
municipalities initially spending below the 15% threshold, we find (a) large increases in health
spending specifically, driven by administrative spending, infrastructure investment, and human
resources; (b) a resulting greater supply of personnel, primary care coverage, and municipal hos-
pitals; and (c) reductions in infant mortality rates, in particular for deaths during the neonatal
period. While we find substantial cost increases and lower mortality elasticities compared with
previous correlational parameters, benefits still exceed costs provided any VSL greater than
US$764 thousand. Our results contribute to the literature by providing one of the first well-
identified causal parameters of the relationship between public spending in health and health
outcomes, by documenting the links in the chain connecting government health expenditure to
health outcomes, and by considering spillovers across space and sectors.

Bio

Damian Clarke is an Associate Professor of economics at the University of Exeter and the University of Chile.  His research interests are centered on maternal and child health and family fertility decisions using microeonometric methods.  His past papers examine the impact of public programs on maternal mortality and morbidity, early life health outcomes for children, and the determinants of parental investment in children.  His work uses a range of methods including experimental and observational designs, frequently with large surveys and administrative databases.  This work has been based in a number of South and Central American countries, African countries, the United States, and Sweden.  In this work he has collaborated with national governments and international development banks. Along with his main substantive questions of interest he is also also interested in applied microeconometrics and computation. Further details of his research, and past and present projects are available on his website at: http://www.damianclarke.net/.

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