Birth Weight and Family Resource Allocations: New Evidence from Twins

It is now widely recognized that birth endowments can have long-lasting effects on later-life outcomes. An intriguing question is how parents respond to shifts in child endowments. Some of the estimates in literaturemay be affected by small samples and unobservable mother-specific factors, limiting the power of policy implications. We exploit variation within twins to estimate the effect of birth weight on health investments in children. Using data from 68 developing countries, we find that lower birth weight babies receive less health care investments in infancy. These effects are larger for countries with higher infant mortality rates, lower life expectancy,and poorer sanitation facilities. Collectively, the findings suggest that parental behaviors contribute to amplify the baseline effects of birth endowments on long-run outcomes.