Environmental regulations on air pollution in China and their impact on infant mortality

Abstract

This study explores the impact of environmental regulations in China on infant mortality. In 1998, the Chinese government imposed stringent air pollution regulations, in one of the first large-scale regulatory attempts in a developing country. We find that the infant mortality rate fell by 20 percent in the treatment cities designated as “Two Control Zones.” The greatest reduction in mortality occurred during the neonatal period, highlighting an important pathophysiologic mechanism, and was largest among infants born to mothers with low levels of education. The finding is robust to various alternative hypotheses and specifications. Further, a falsification test using deaths from causes unrelated to air pollution supports these findings.

Introduction

There is little disagreement that air pollution poses a major environmental risk to human health. Improved air quality worldwide is correlated with the amelioration of numerous health problems, including respiratory infections, cardiovascular diseases, and lung cancer.¹ Developing countries rank highest in air pollution worldwide, and children under age five in these countries are considered to be the most vulnerable population. Elevated air pollution is generally beyond the scope of individual control and falls to the public sector. However, environmental regulations on air pollution are extremely contentious. This was evident at the 2009 United Nations Climate Change Conference, also known as COP15, held in Copenhagen, where many developing countries refused to commit themselves to a legal framework for reducing pollution emissions. Their opposition is largely due to the prevailing concern that the economic costs associated with pollution abatement may outweigh the health benefits. Accordingly, air pollution regulations are still rare in developing countries, and whether, and to what extent, environmental regulations on air pollution lead to health benefits remains an important question yet to be answered.

In this paper, we examine the effect of environmental regulations pertaining to air pollution on infant mortality in China. As China's economy continued to grow at unprecedented rates for the last several decades, ambient air quality deteriorated to one of the worst levels in the world due to its heavy reliance on coal-fired energy generation. In 1998, the Chinese government imposed stringent regulations on pollutant emissions from power plants, in one of the first attempts on such a large scale in developing countries. This so-called the Two Control Zone (TCZ) policy designated nearly 175 prefectures exceeding the nationally mandated pollution standards as the TCZ. In these areas, the power industry, which contributed more than 90 percent of air pollution, was forced to reduce emissions and install new pollution control technologies, while also shutting down a massive number of small, inefficient power plants. For our purpose, the TCZ policy provides a quasi-experimental environment, wherein the intensity of exposure to the regulations can be defined by the TCZ regulatory status, and we are able to compare changes in infant mortality rate (IMR) before and after the policy reform, between the cities assigned and not assigned as the TCZ.

To implement the analysis, we draw IMR data from the Chinese Disease Surveillance Points (DSP) system that collected birth and death registrations for 145 nationally representative sites from 1991 through 2000. IMR, defined as the number of infant deaths under age one per 1000 live births in a given year, is available for each DSP site by year level, linked with detailed information on birth characteristics and parental attributes. We match this dataset to the TCZ regulatory status assigned to individual cities, based on the governmental report, and thereby estimate the treatment effect of the regulations.

We find that the air pollution regulations led to significant reductions in infant mortality. The difference-in-differences estimates suggest that the regulations have led to 3.29 fewer infant deaths per 1000 live births than would have occurred in the absence of the regulations. This corresponds to a 20 percent reduction in IMR. 63 percent of the reduction in infant mortality occurred during the neonatal period, highlighting an important pathophysiologic mechanism, and the greatest reduction of mortality occurred among children born to mothers with low educational levels.

A major methodological challenge, however, is that the TCZ designation rule may not be orthogonal to unobserved characteristics that contribute to reductions in air pollution and infant mortality. The present study conducts a number of robustness checks and a falsification test to address this issue. First, we confirm that the TCZ status has little association with changes in observable covariates, assuring that there is no systematic difference in concurrent trends in observable characteristics between the TCZ and non-TCZ cities. Although this is not a direct test of the exclusion restriction, since it requires that TCZ status not be correlated with trends in unobservable factors, this result leads us to believe that the treatment effect is less likely to be confounded by differential trends in unobservable factors as well (Altonji et al., 2005). Second, the regression is also directly adjusted for differential pre-existing trends in mortality, yet the estimates are essentially unaffected. Lastly, the policy had no impact on infant deaths due to accidental causes. The absence of a causal mechanism linking air pollution to these causes of death serves as falsification evidence, suggesting that differences in access to or quality of medical services and technologies cannot be the sources of bias. Overall, there is no evidence that the estimates are driven by inappropriate identification assumptions, leading us to believe that the treatment effect based on the TCZ status is indeed not spurious but causal.

This study makes three major contributions to the existing literature. First, by exploiting regulation-induced changes in air quality, it addresses a policy-relevant question: to what extent do environmental regulations in developing countries lead to reductions in infant mortality? Several prior studies have focused on variation in air quality induced by recession (Chay and Greenstone, 2003a), weekly fluctuations (Currie and Neidell, 2005), wildfires (Jayachandran, 2009), or wind directions (Luechinger, 2014). Chay and Greenstone (2003b) provide compelling evidence for the linkage between the Clean Air Act of 1970 and infant mortality in the U.S. It remains to be determined, however, whether, and how effectively, environmental regulations can improve human health in developing countries.² A recent study by Greenstone and Hanna (2011) examines regulations on air pollution and water pollution in India since 1987. They find these regulations efficacious in reducing air pollution, but such reductions led to modest and statistically insignificant reductions in infant mortality. Our study provides an interesting contrast, finding that infant mortality significantly responded to the environmental regulation. Further, the regulation we focus on targeted coal for energy generation, which is the major contributor to air pollution in many other developing countries as well, whereas Greenstone and Hanna (2011) focus on vehicular pollution.^3,4 The findings in this study accordingly present relevant estimates for the effect of environmental regulations in developing countries implementing similar policies on coal in the power industry.

Second, the present study contributes to our understanding of the relationship between air pollution and infant mortality at greater concentration levels. Previous evidence is predominantly derived from the United States or other developed countries, where pollution is relatively low.⁵ Since we know little about the shape of the dose–response relationship, it is consequently difficult to predict the marginal impact of pollution reduction in the presence of non-linear relationship.⁶ Air pollution in China is one of the highest in the world. Its total suspended particulates (TSP) level in 1995 was four times higher than the WHO standards, and four times higher than the level in the United States in 1970, when the Clean Air Act was amended, as examined in Chay and Greenstone (2003b). Thus, estimates in China provide compelling evidence applicable to the distinctive context of developing countries where air pollution levels are relatively high.

Third, there is extensive literature showing differential patterns according to socioeconomic status, yet it is still an open question as to whether air pollution also exhibits differential impact on infant mortality (Currie and Hyson, 1999, Case et al., 2002, Jayachandran, 2009). While infants in poor countries are considered to be the most susceptible to the effect of pollution, not only because of high pollution levels but also because families lack the resources or knowledge necessary to avoid exposure, the impacts may be small if air pollution does not have first-order effect on them.⁷ Thus, the present study helps identify vulnerable population in designing policies.

The current research design has several advantages over previous studies. First, this study focuses on infants, not only because they are particularly vulnerable to air pollution due to their weak respiratory system, but because focusing on infant mortality mitigates complicating factors associated with adult mortality. For example, adult deaths correlate more closely to chronic disease conditions than to acute changes in air quality. In addition, adults may migrate into less polluted areas. Addressing infant mortality circumvents these issues, if not completely, because it is relatively less difficult to identify causes of death during the first year of birth, and because migration rates are low for pregnant women and infants. Lastly, China is not only one of the most polluted countries but also one of the first developing countries to regulate air pollution on such a large-scale. It is evident that China serves as a rare research environment in which to assess the impact of environmental regulations at greater concentration levels.

The rest of the paper is organized as follows. Section 2 provides the historical background on air pollution and national air pollution regulations in China. Section 3 describes the data and the descriptive statistics. Section 4 presents the econometric framework and its validity, and Section 5 presents empirical results. Section 6 concludes.