The Impact of Trade Liberalization on Health: Evidence from Pakistan

Abstract

The literature predicts both positive and negative health outcomes in developing economies as a result of increasing trade. Does openness to trade help to improve health indicators in the case of Pakistan? This study attempts to answer this question using data from 1975 to 2016. This study uses life expectancy and infant mortality as health indicators while trade to GDP ratio as trade openness indicator. For robustness analysis, the study uses international trade taxes, exports to GDP ratio and imports to GDP ratio. The empirical results of the study show that 1% increase in trade to GDP ratio significantly decreases life expectancy by 0.05 years and significantly increases infant mortality by 0.47 deaths. Thus, trade causes adverse effects on health indicators in the case of Pakistan.