Oil and Mortality

Abstract

This paper investigates the impacts of a large and exogenous oil price shock in December 1973 on mortality rates of the major oil producer nations of the Middle East and North Africa. We use longitudinal data from 1960 to 2014 and we apply the difference-in-differences approach to investigate the main question of the research. Our findings show that the oil price shock did not lead to higher GDP per capita, but it did lead to lower mortality. These findings are puzzling. A possible explanation is that the oil price shock allowed for higher spending on publicly funded health care. We find a positive impact of the oil price increase on the number of hospital beds which perhaps suggests that higher oil revenues increased spending on public health and that possibly decreased mortality.