Health in Post-Communist Economies

One of the most striking trends in population health over the last two decades has been the rapid fall in life expectancy at birth in Russia and other post-communist economies in the late 80s through the mid1990s. From the late 1990s onwards, the country rebounded, but still has not recovered to the pre-drop values (in fact, the Russian life expectancy in 2007 is still lower than it was in 1970).

A recent article in the Lancet examines the causes of this notable drop using longitudinal sample of Eastern European and former Soviet Bloc countries and suggests that rapid and ill-planned economic-reform (mass privatization), which lead to equally drastic increases in male unemployment rates, could be responsible for the depressing trends in mortality rates (here is a link to the Lancet version and here is a similarly titled and much longer working paper version). The association between rapid privatization and mortality holds even when the authors control for a variety of other correlated factors (prices, trade liberalization, income, etc). The authors also find that the effect of privatization is lower when more people are engaged in the public space (i.e., more "social capital").

This is an interesting and important question and the authors try to address the robustness of their results to addressing a variety of alternate hypotheses (see, especially, the longer working paper version). However, given data constraints, it is likely difficult to control for shocks that may induce the need for a policy change (for example, economic reform was necessitated by changes country specific trends that would lead to drops in the mortality rate anyway) as well as other pre-existing trends. In addition, the findings with social capital are difficult to interpret since interactions with others and participation in public organization may be correlated with other determinants of mortality or the need to introduce reform itself. A piece on the study in this week's Economist raises some of these concerns, as well (though some of the arguments they make do not seem to be that compelling). in any case, I think researchers have cast an interesting light on an important population health topic and the whole line of inquiry deserves further research attention.

I've come across a spate of other recent research on post-communist economies, as well. Some of the authors on the privatization papers have also written about the effect of another set of structural reforms - in particular, meeting the conditions to receive loans from the International Monetary Fund - on tuberculosis rates. The idea here is that meeting IMF conditionality siphons money from public health and health care to other aspects of the macroeconomy. The findings of this paper suggest that IMF debt and restructuring lead to increases in TB rates in former Soviet Bloc and Eastern European countries, though many of the same concerns I voiced earlier apply to this paper, as well (see especially their meta-analysis of their results - the estimated IMF effect drops as additional controls are added).

Finally, at the American Economic Association conference a few weeks back (more on this in a later post), I saw an interesting presentation on the impacts of parental alcohol use early in childhood on health outcomes later in life (here is a link to the paper). Previous studies on this subject have had difficulty establishing causality, as parental alcohol consumption is a choice and the same tastes and preferences that govern that choice may also influence how they invest in their kids' health. This paper gets around this issue using the discontinuous implementation of a prohibition program. The study thus compares kids born just before the program (and just after) to those born during the program. It also utilizes the fact that prohibition was more strongly enforced in some areas than others.

The author finds strong impacts on health later in adolescence (kids born during probition tend to be taller than their counterparts and report less illnesses). Most interestingly, the prohibition cohort was more likely to receive key vaccinations relative to the controls, suggesting that one mechanism linking parental alcohol use to later health outcomes could be that expenditures on alcohol crowd out expenditure on more productive investments. The biggest threat to validity in this paper is the fact that much of the movement in health outcomes during prohibition appears to be in the areas where the law was less enforced rather than in treatment group.