Health Insurance and Child Mortality in Costa Rica

William H. Dow, University of North Carolina at Chapel Hill
Kammi K. Schmeer, University of North Carolina at Chapel Hill

This study uses a natural experiment approach to evaluate the effect of health insurance on infant and child mortality. In the 1970s Costa Rica adopted national health insurance which expanded insurance coverage from 42 percent of the population in 1973 to 75 percent by 1980. We use county-level vital statistics and census data to isolate the causal insurance effect on mortality using county fixed effects models. We find that insurance increases are strongly related to mortality decreases at the county level before controlling for other time-varying factors. However, this effect can be almost fully explained by changes in other correlated maternal, household, and community characteristics. Although multicollinearity complicates exact causal attribution, these results question the proposition that health insurance can lead to large improvements in infant and child mortality, or that expanding insurance to the poor can substantially narrow socioeconomic differentials in mortality.