Working Paper: NBER ID: w25304
Authors: Dara Lee Luca; David E. Bloom
Abstract: This paper investigates the economic returns to parental health. To account for potential endogeneity between parental health and child outcomes, we leverage longitudinal microdata from Indonesia to estimate individual fixed effects models. Our results show that the economic returns to parental health are high. We show that maternal health not only significantly affects her children’s health, but is also intrinsically linked to her spouse’s labor market status and earnings. Paternal health appears to be more linked to child schooling outcomes, especially for girls. When both parents are in poor health, the negative effects on their children are compounded. Additionally, the consequences of poor parental health are enduring. Longer-run effects of poor parental health manifest in a lower likelihood of high school completion, fewer years of schooling, and poorer adult health.
Keywords: parental health; child outcomes; Indonesia; human capital; endogeneity
JEL Codes: I10; J13; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Maternal health (I14) | Children's health (I19) |
| Maternal health (I14) | Educational attainment (I21) |
| Paternal health (I19) | Child schooling outcomes (I21) |
| Poor maternal health + Poor paternal health (I14) | Children's health (I19) |
| Poor parental health (I12) | High school completion rates (I21) |
| Poor parental health (I12) | Years of schooling (I21) |
| Poor parental health (I12) | Adult health outcomes (I12) |
| Health shocks to father (I12) | Household consumption (D10) |
| Health shocks to father (I12) | Food and education expenditures (H52) |
| Parental health (I19) | Human capital production of children (J24) |