Developing countries rank highest in air pollution worldwide, yet regulations of such pollution are still rare in these countries, thereby whether, and to what extent, those regulations lead to health benefits remain an open question. Since 1995, the Chinese government has imposed stringent regulations on pollutant emissions from power plants, as one of the first regulatory attempts on a large scale in a developing country. Exploiting the variation in the regulatory status across time and space, we find that infant mortality fell by 21 percent in the treatment cities designated as the so-called “Two Control Zones." The greatest reduction of mortality occurred during the neonatal period, highlighting the importance of fetal exposure as a biological mechanism, and was largest among the households with low mother's educational attainment.
On the other hand, the regulations are found to be uncorrelated with deaths from causes unrelated to air pollution. When the regulatory status is used as an instrumental variable for air pollution reductions, we estimate that the impact of a unit change in total suspended particulates on infant mortality is of similar magnitude to that found in the U.S., but the elasticity is substantially higher in China, suggesting the greater benefits associated with regulations when pollution is already quite high.