Wealth and health revisited: Economic growth and wellbeing in developing countries, 1970 to 2015

Is wealthier always healthier, or are the health effects of economic growth trivial, irregular, or perhaps even detrimental? Using data for up to 134 developing countries between 1970 and 2015, this article revisits the effect of economic growth on health, focusing on infant mortality, life expectancy, and caloric consumption. The analysis enlarges the geographical and temporal scope of previous samples and attempts to isolate the causal effects of growth using two-stage models with instrumental variables. Results show that five-year economic growth rates improve all three health outcomes, even after controlling for other important determinants and accounting for the possibility of reverse causality. Growth effects are largest for infant mortality rates. Nevertheless, there are diminishing returns to economic growth as a function of economic development: as countries become more affluent, the benefits of growth for health diminish.