Child Mortality Reacts to Relative Prices

This paper argues that, for a given average level of income per capita, the real currency depreciation has a negative impact on child survival, due to higher relative prices of tradable goods such as food and drug. This assumption is significantly tested from a dynamic panel model covering about one hundred developing countries and the period 1965-1999 and using a logit measure of child survival. Moreover, it appears that this effect of a real depreciation decreases when the rate of urbanisation increases, suggesting that rural and urban areas do not react similarly: dynamic panel estimates on a sub sample of 21 sub-Saharan African countries for which rural and urban data are available confirms that only in rural areas child survival is negatively affected by real depreciation. These estimates also shed light on an international convergence process for child survival which is limited to urban areas.