Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5182
Though the positive income gradient of child health is well documented in developed countries, evidence from developing countries is rare. Few studies attempt to identify a causal link between family income and child health. Utilizing unique longitudinal data from the China Health and Nutrition Survey, we have found a positive, age-enhancing income gradient of child health, measured by height-for-age z scores. The gradient is robust to alternative specifications and a comprehensive set of controls. Using the fact that the rural tax reform implemented since 2000 created an exogenous variation in family income across regions and over time, we explore a causal explanation for the income gradient, and find that it has a very strong independent causal effect on child health.