I investigate whether the enhanced HIPC Initiative has an impact on child health by applying micro data on infant mortality from country-specific Demographic and Health Surveys (DHS) from 56 lowand middle-income countries of which 31 are HIPCs. The retrospective fertility nature of the data from the DHS allows for panel data analysis using the within-mother variation in the probability of survival of babies born before and after the countries reach the Decision and Completion Points of the debt relief program. Within-mother estimation accounts for unobservable characteristics of the family and controls for effects that arise due to changes in the demographic composition. This reduces problems with crosscountry confounding factors – say, if households in HIPCs, on average, are different from households in non-HIPCs – and facilitates a causal interpretation of the results. In addition, this approach allows for distributional analysis of the debt relief effects on child health and the detailed DHS data give indications of potential health mechanisms through which HIPC affects infant mortality.

To the best of my knowledge, this is the first paper which uses cross-country micro data to analyze the potential impacts of debt relief on child health. It aims to contribute to the vast empirical literature on the effects of development assistance in general and debt relief in particular on child health. My findings suggest that when a country qualifies for Decision Point, the probability of infant mortality goes down by approximately 0.5 percentage points or five infant deaths per 1,000 live births. This represents 7 percent of the sample mean and translates into approximately 3,000 fewer infant deaths in an average HIPC in the year of Decision Point. Results are stronger for infants born to mothers who are poor and mothers living in rural areas. Neonatal mortality is largely unaffected by debt relief, which indicates that the impacts of Decision Point on infant mortality go through interventions or policies which affect infant survival after the first month of life. Moreover, analysis of potential health mechanisms suggest that the improvements in infant mortality are driven by improved access to vaccines early in life and during mothers’ pregnancies. Immunization rates against Tuberculosis and Polio among children born to poor, uneducated, and rural mothers go up 4 to 6 percent of the sample coverage rates in these groups and Tetanus immunization rates among poor, uneducated, and rural pregnant mothers increase with about 9 percent of the sample means. The improvement in infant mortality takes place at Decision Point with no additional effect at Completion Point where full debt relief is granted. Results are robust to various country-specific confounders and other sensitivity tests.

The rest of the paper is structured as follows. Section 2 gives a brief background of the HIPC Initiative. I present the data on child health and the empirical specification in Section 3 and the results and various sensitivity analyses in Section 4. Section 4 also includes health mechanisms analysis through which the HIPC Initiative may affect child health. Concluding remarks are given in Section 5.

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