The impact of early-life shocks on adult welfare in Brazil: Questions of measurement and timing

Recent literature provides evidence that income shocks early in life can have long-run consequences on adult welfare. Rural Brazil frequently suffers from rainfall variations that negatively impact vulnerable households, who often lack the means for coping with these events. This paper evaluates how early-life rainfall shocks influence adult health and socioeconomic outcomes in Brazil. We find evidence that several critical periods can produce long-run consequences. Using rainfall deviations, our two most robust results are that greater rainfall in utero negatively impacts adult incomes (finding that a one standard deviation increase in rainfall causes adult incomes to fall by 7–10 percent) and that greater rainfall in the second and third years of life improve adult health (increasing body mass index by 0.16). However, our results depend crucially on our choices regarding two features. First, our results differ across two common measures of critical periods, which are used to define shocks relative to the timing of one's birth. Second, the way rainfall variation is measured also matters, with use of an extreme weather indicator suggesting heterogeneous effects by gender, with extreme weather negatively impacting women's health (both before and after birth) but positively affecting several men's outcomes (both before and after birth). We find some evidence that mortality selection may drive some of these results. This paper provides further evidence that early-life shocks (from in utero through the third year of life) can cause long-run consequences, but also suggests that more attention should be paid to the specific measurement and timing of rainfall shocks.