The Power of Intelligence Element: The Long-term Impact of the Prevention of Iodine Deficiency Disorders on Economic Development in China

Abstract

Disease is an important factor affecting economic development. Researches show the diseases like malaria, hookworm and HIV can significantly impede the human capital accumulation and economic development in the endemic regions around the world. Compared with diseases caused by parasite or virus, the diseases caused by micronutrients deficiency are less noticed. However, the impact of micronutrients deficiency could be severe, especially the deficiency of iodine. Iodine deficiency during pregnancy can hamper the brain development of fetus, leading to permanent intelligence damage. Because intelligence is an important factor for human capital accumulation, the widespread popularity of iodine deficiency is likely to have a negative impact on economic development. China’s large-scale campaign to prevent and control iodine deficiency since 1970s could have significant impacts on economic development. Before the campaign, endemic iodine deficiency was found among all the provincial administration regions except Shanghai; the number of iodine deficiency patients was estimated to be 35 million; about 200 thousand people were diagnosed as cretinism; and the population whose intelligence was slightly affected by iodine deficiency（subclinical cretinism）could be much larger than cretinism. Considering the severe threat of iodine deficiency, the Chinese government launched a large-scale campaign of iodine supplementation across the country since 1975. By 1985, 83.23% of the endemic countries and 87.3% of the population in endemic regions had been covered by salt iodization program. More than 22 million iodine deficiency patients had been treated in this period, and the birthrate of cretinism had been decreased by a great magnitude. Since the iodine supplementation campaign improved the iodine nutrition for a large population of China, it’s likely to increase people’s intelligence and affect human capital accumulation and economic development in China deeply. This paper studies the long-term impact of iodine supplementation on individual height, education and income by using the micro data provided by China Labor-force Dynamic Survey（CLDS）in 2012. Difference-in-difference model is used as our empirical strategy. The results show that: iodine supplementation during the early childhood has no significant impact on individual height, but iodine supplementation significantly improves individual education and income. If the incidence of cretinism increased by 1‰ before the iodine supplementation, the years of education for individuals born in that region after the iodine supplementation would increase by 0.562 year while the annual income would increase by 7.83%. Besides, we find the fetal stage is the most important period for iodine supplementation, and the effect of iodine supplementation after fetal stage is much smaller. Therefore, iodine supplementation is an effective measure to boost economic growth by improving people’s intelligence and promoting human capital accumulation. This paper contributes to the current researches in the following aspects. Firstly, for the remarkable economic growth of China since the reform and opening-up policy, although many scholars have provided the explanation from the channels like political institution, economic institution and infrastructure, little attention has been paid to the important role of large-scale campaign of disease prevention and treatment. Thus, this paper deepens our understanding of China’s economic miracle from a new perspective. Secondly, by studying the long-term impact of iodine deficiency prevention campaign, this paper also enriches the field of the long-term impact of historical events. Finally, our empirical findings provide guidance for the further insurance of people’s iodine nutrition and prevention of intelligence damage in poor regions.