Does Raising Family Income Cause Better Child Health? Evidence from China

Abstract

AbstractFew studies have attempted to identify a causal link between family income and child health, especially in developing countries. This article takes advantage of an exogenous income shock created by China’s rural tax reform between 2000 and 2003 to study the causal impact of household income on child health. The analysis finds that an increase in family income significantly raises children’s height-for-age z-scores. These effects are robust to alternative specifications and a comprehensive set of controls. The article also investigates possible mechanisms generating this result. We find that with a higher income level, better nutritional intake partially accounts for the improvement in child health.