The Mortality Trade-off in Local Oil Booms: Production Capacity vs Price Windfalls in Colombia

Carlos H. Cubillos and Richard Jaimes
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Carlos H. Cubillos: Pontificia Universidad Javeriana.
Richard Jaimes: Pontificia Universidad Javeriana.

Vniversitas Económica, 2026, vol. 26, issue 2, No 2, 42 pages

Abstract: This paper documents that local oil booms in Colombia affect residence-based mortality through two distinct economic channels with opposite signs and through different cause-of-death components. A one-standard-deviation increase in municipal oil production lowers total mortality by 2.1 deaths per 100,000 inhabitants, concentrated in non-transmissible disease. A one-standard-deviation increase in price-weighted exposure raises total mortality by 4.2 deaths per 100,000, concentrated in non-transmissible disease and external (non-suicide) causes. The mechanism is institutional: only sustained production formalizes labor and shifts households from the subsidized to the contributory health insurance regime, while price windfalls raise municipal revenue by comparable magnitudes but leave the formal-sector margin untouched. The 2010–2014 boom is dominated by the production channel; the 2015–2020 bust by the dissolution of the price windfall, which accounts for an aggregate reduction of approximately 2,300 deaths in the producer subsample.

Keywords: Mortality; cause of death; health insurance; oil booms; fiscal capacity; commodity prices; Colombia (search for similar items in EconPapers)
JEL-codes: H75 I15 O13 Q33 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:col:000416:023135

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