Born in Transition: the Effect of Economic Shocks in Early Childhood on Health and Educational Outcomes

This paper estimates the effect of economic shocks that affect families with young children on children’s health, educational and behavioral outcomes in adolescence. Transition period in Russia provides a natural experiment setting for estimating this effect. During the economic turmoil of early transition many people lost their jobs, experienced salary declines or occupational downgrading. These individual labor market shocks were mainly caused by the structural changes in the economy. Analyzing household survey data from Russia I find that children who were under the age of five and whose parents were negatively affected during the early transition have poorer health in adolescence and are less likely to have completed high school. For the comparison group – children who were at the school age during the early transition – there is an effect on educational outcomes and risky behaviors but not on health. Absence of a father in a family during the early transition years has a negative health effect only for the younger age group. I also find differential effects for boys and girls, by mother and father