Public Health Investments and the Infant Mortality Gap: Evidence from Federal Sanitation Interventions on U.S. Indian Reservations

To what extent do differential levels of investment in public health inputs explain observed differences in health outcomes across socioeconomic and racial groups? This study investigates the impact of 3,700 projects that were part of a widespread Federal initiative to improve sanitation infrastructure on U.S. Indian reservations starting in 1960. Sanitation investment substantially reduced the cost of clean water for households, leading to sharp reductions in both waterborne gastrointestinal disease and infectious respiratory disease among Native American infants. The sanitation program was quite cost-effective, in part because improvements in the overall disease environment also reduced infectious respiratory disease among nearby white infants. Despite the health externalities, Federal sanitation interventions explain almost forty percent of the convergence in Native American and white infant mortality rates in reservation counties since 1970.