The lasting health and income effects of public health formation in Sweden

Socio-economic inequalities are remarkable in contemporary developed countries and continue to grow. The sources of these phenomena are not understood, and there is no agreement as to when in an individual’s life they originate, from early childhood to adulthood. The literature showing that health in infancy may be an important factor in later-life health and income trajectories is expanding, but empirical evidence is still scarce. This paper is the first to link differences in individual access to better health care during infancy to income and health outcomes in old age. Due to the public health care reform that became one of the first elements of the Swedish welfare state, between 1890 and 1917, all rural areas established local health districts that implemented preventive measures with regard to the spread of infectious diseases. Using administrative longitudinal population data and exploiting exogenous variation in the timing of the implementation of the reform across parishes, we examine whether individuals treated in their infancy have an advantage in old age. Our findings indicate that treatment in the public health care system in infancy leads to a significant reduction in mortality, with the largest effects on cardiovascular diseases and to an increase in individual permanent incomes. The effects are universal across different subpopulations, with somewhat stronger responses among individuals from poor socio-economic backgrounds.