Trade Liberalization and Mortality Rates: Evidence of Pro-Cyclical Mortality From Brazil.

Abstract

We trace the evolution of all-cause mortality rates in Brazilian regions with varying exposure to trade-induced economic shocks before, during, and after liberalization reforms in the 1990s. We find consistent evidence of pro-cyclical mortality, with areas more exposed to tariff reductions experiencing larger declines in mortality across varying time horizons. The observed decline in mortality rates is evident across sex, age groups, and for both internal and external causes of mortality. We falsify the observed relationship between mortality and tariff reductions with analyses of causes of death that are plausibly unrelated to economic activity. Concerning proximate mechanisms involved in our finding of pro-cyclical mortality, we show that healthcare infrastructure expanded in local economies more affected by the trade-induced economic shock. This expansion was characterized by the increased capital-intensity of care, facilitated by the import of diagnostic technologies that reduce mortality from internal causes. We also find supporting evidence for the idea that pro-cyclical mortality is partially caused by a decrease in transport and non-transport-related accidents. Overall, our findings highlight an underappreciated dimension of trade policy effects, namely public health.