Trade Liberalization and Child Mortality: A Synthetic Control Method

This paper investigates the causal effect of trade liberalization on children mortality by exploiting 40 policy reform experiments spanning the 1960-2010 period. We use a new approach – the Synthetic Control Method – for comparative case studies. Using this method we assess at the country level the trajectory of post-reform health outcomes of treated countries, which experienced a trade liberalization, with the trajectory of a combination of similar untreated countries. Contrary to previous findings, we showed that the effect of trade liberalization on health outcomes display a huge heterogeneity both in the direction and the magnitude of the effect. Among the 40 investigated case studies, 20 displayed a reduction in children mortality after a trade liberalization, and the majority of these are statistically significant. In 18 country casestudies we did not find any relevant effect, while in two cases ‒ South Africa and Mauritania ‒ we found a strong statistically significant worsening in child mortality after trade liberalization. Yet, the underline reasons of these negative effects are driven by very different situations.

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JEL Codes:
Q17; Q18; O13; O24; O57; I15; F13; F14.

 Record created 2017-04-01, last modified 2018-01-23

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