Job market paper: Cheaper and better? Explaining the newborn mortality advantage at public versus private hospitals in India.
Abstract: In two large Indian states, rural mothers who give birth in public (government-run) clinics and hospitals are poorer and pay less for natal care than at private clinics and hospitals—yet, puzzlingly, their newborns survive at much higher rates. I show that these public facilities drastically reduce the risk of newborn death, by over 25 per thousand births, with two complementary empirical strategies: (i) a strategy that relates village-level neonatal mortality to the share of neighboring births that occur in public facilities to account for selection, and (ii) a spatial regression discontinuity that compares births on either side of borders separating districts with different public-birth shares. I present evidence that skin-to-skin contact at birth, recommended by the World Health Organization but often eschewed by private facilities, is responsible for this mortality advantage. These results suggest that private providers cause over 37,000 children’s deaths each year, due either to incompetence or to incentives that conflict with providing high-quality care.