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Family investment responses to childhood health conditions: Intrafamily allocation of resources

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  • Rosales-Rueda, Maria Fernanda

Abstract

The onset of a health condition during childhood impairs skill formation. A number of studies have investigated the long-lasting effects of poor health during childhood on later-in-life outcomes. However, this evidence ignores how parents respond to the onset of health conditions. Do their investments reinforce the health condition? Or compensate, or behave neutrally? If parents change their investments, the relationship between early health and later outcomes combines the biological effect and the investment responses. To address this question, I use within-sibling variation in the incidence of health conditions to control for selection from unobserved household heterogeneity. Parents invest, on average, 0.16 standard deviations less in children with mental conditions relative to their healthy siblings, using a measure of investment that includes time and resources. On the contrary, when children have a physical condition, parental investments do not differ across siblings. Results are robust to alternative measures of health conditions and the inclusion of child fixed effects.

Suggested Citation

  • Rosales-Rueda, Maria Fernanda, 2014. "Family investment responses to childhood health conditions: Intrafamily allocation of resources," Journal of Health Economics, Elsevier, vol. 37(C), pages 41-57.
  • Handle: RePEc:eee:jhecon:v:37:y:2014:i:c:p:41-57
    DOI: 10.1016/j.jhealeco.2014.05.006
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Michael Grätz & Florencia Torche, 2016. "Compensation or Reinforcement? The Stratification of Parental Responses to Children’s Early Ability," Demography, Springer;Population Association of America (PAA), vol. 53(6), pages 1883-1904, December.
    2. Kull, Melissa A. & Coley, Rebekah Levine, 2015. "Early physical health conditions and school readiness skills in a prospective birth cohort of U.S. children," Social Science & Medicine, Elsevier, vol. 142(C), pages 145-153.
    3. Cheti Nicoletti & Valentina Tonei, 2017. "The response of parental time investments to the child’s skills and health," Discussion Papers 17/08, Department of Economics, University of York.
    4. Nicoletti, Cheti & Tonei, Valentina, 2017. "The Response of Parental Time Investments to the Child's Skills and Health," IZA Discussion Papers 10993, Institute for the Study of Labor (IZA).
    5. Bladimir Carrillo Bermudez & João Eustáquio De Lima & Juan C. Trujillo, 2016. "Weather Fluctuations, Early-Life Conditions, And Parental Investments: Evidence From Colombia," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 140, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].

    More about this item

    Keywords

    Health conditions; House hold behavior; Family investments; Intra-family allocation; Capabilities; Sibling estimator;

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

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