Induced Innovation and Social Inequality: Evidence from Infant Medical Care / David M. Cutler, Ellen Meara, Seth Richards.

Format:

Book

Author/Creator:

Cutler, David M.

Contributor:

National Bureau of Economic Research.

Meara, Ellen.

Richards, Seth.

Series:

Working Paper Series (National Bureau of Economic Research) no. w15316.

NBER working paper series no. w15316

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Induced Innovation and Social Inequality

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2009.

Summary:

We develop a model of induced innovation where research effort is a function of the death rate, and thus the potential to reduce deaths in the population. We also consider potential social consequences that arise from this form of induced innovation based on differences in disease prevalence across population subgroups (i.e. race). Our model yields three empirical predictions. First, initial death rates and subsequent research effort should be positively correlated. Second, research effort should be associated with more rapid mortality declines. Third, as a byproduct of targeting the most common conditions in the population as a whole, induced innovation leads to growth in mortality disparities between minority and majority groups. Using information on infant deaths in the U.S. between 1983 and 1998, we find support for all three empirical predictions. We estimate that induced innovation predicts about 20 percent of declines in infant mortality over this period. At the same time, innovation that occurred in response to the most common causes of death favored the majority racial group in the U.S., whites. We estimate that induced innovation contributed about one third of the rise in the black-white infant mortality ratio during our period of study.

Notes:

Print version record

September 2009.