Working Paper: NBER ID: w19505
Authors: John Parman
Abstract: There is a growing body of evidence showing that negative childhood health shocks have long term consequences in terms of health, human capital formation and labor market outcomes. However, by altering the relative prices of child quality across siblings, these health shocks can also affect investments in and the outcomes of healthy siblings. This paper uses the 1918 influenza pandemic to test how household resources are reallocated when there is a health shock to one child. Using a new dataset linking census data on childhood households to health and education data from military enlistment records, I show that families with a child in utero during the pandemic shifted resources to older siblings of that child, leading to significantly higher educational attainments and high school graduation rates for these older siblings. There are no significant effects for younger siblings born after the pandemic. These results suggest that the reallocation of household resources in response to a negative childhood health shock tended to reinforce rather than compensate for differences in endowments across children.
Keywords: Child health; Influenza pandemic; Sibling outcomes; Education; Resource allocation
JEL Codes: I1; J13; J24; N3; N32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| 1918 influenza pandemic (N12) | educational resource reallocation (I24) |
| educational resource reallocation (I24) | older siblings' educational attainments (I24) |
| educational resource reallocation (I24) | older siblings' high school graduation rates (I24) |
| 1918 influenza pandemic (N12) | differences in endowments across children (J79) |
| 1918 influenza pandemic (N12) | younger siblings' educational outcomes (I24) |