We estimate the effect of income on health using cross-country,
time-series data on health (infant and child mortality and life
expectancy) and income per capita. We use instrumental variables
estimates using exogenous determinants of income growth to identify the
pure income effect on health, isolated from reverse causation or
incidental association. The long-run income elasticity of infant and
child mortality in developing countries lies between -0.2 and -0.4.
Using these estimates, we calculate that over a half a million child
deaths in the developing world in 1990 alone can be attributed to the
poor economic performance in the 1980s.