The local health impacts of natural resource booms

Abstract

This paper uses novel micro-data on natural resources and administrative health data in Brazil to study how economic booms in minerals affect health at birth. By implementing a reduced-form estimation of shift-share research designs, the identification strategy relies on the exogeneity of global commodity prices to municipality-specific health outcomes. I find that, following changes in international prices, municipalities with historically more endowments have a higher number of premature births and births with low Appearance, Pulse, Grimace, Activity, Respiration scores. The impacts are primarily driven by metallic minerals. Instead, industrial minerals do not appear to have any effect on birth outcomes. Even though booms in metallic minerals generate benefits through resource windfalls-by increasing wealth and generating economic opportunities-the investigation of mechanisms reveals that they also result in costs-due to pollution-which seem to prevail. Hence, some metallic minerals remain a curse more than a blessing.

Keywords: birth outcomes; economic booms; minerals.