Infant health and later-life labour market outcomes : Evidence from the introduction of sulfa antibiotics in Sweden

There is a growing body of literature showing that health in infancy has a strong influence on health and productivity later in life. This paper uses exogenous improvements in infant health generated by the introduction of a medical innovation in the late 1930s as treatment against several infectious diseases, in particular pneumonia reduced by the advent of the sulfa medicaments. Based on rich administrative population data for Sweden 1968–2012 and archival data on the availability of sulfa antibiotics, it explores the effect of reduction in exposure to pneumonia in infancy on labour market outcomes discerned in adulthood of the affected cohorts. Our findings suggest that mitigation of pneumonia disease burden in infancy substantially reduced probability of working disability and increased labour income in late adulthood. Regarding the mechanisms, the beneficial effects are strong for health, measured with reduced number of hospital admissions, and somewhat weaker for years of schooling. These effects are fairly equal among males and females, and larger among individuals from disadvantaged backgrounds. All effects are robust to various specifications including regional and family factors.