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Parental Response to Early Human Capital Shocks: Evidence from the Chernobyl Accident

Author

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  • Halla, Martin

    (WU Vienna University of Economics and Business)

  • Zweimüller, Martina

    (University of Linz)

Abstract

Little is known about the response behavior of parents whose children are exposed to an early-life shock. In this paper we interpret the prenatal exposure of the Austrian 1986 cohort to radioactive fallout from the Chernobyl accident as a negative human capital shock and examine their parents' response behavior. To identify causal effects we can rely on exogenous variation in the exposure to radioactive fallout (over time and) between communities due to geographic differences in precipitation at the time of the accident. We find robust empirical evidence of compensating investment behavior by parents in response to the shock. Families with low socioeconomic status reduced their family size, while families with higher socioeconomic status responded with reduced maternal labor supply. Compensating investment made by the latter group seems relatively more effective because we do not find any detrimental long-term effects for exposed children from higher socioeconomic backgrounds. In contrast, exposed children from low socioeconomic backgrounds have significantly worse labor market outcomes as young adults.

Suggested Citation

  • Halla, Martin & Zweimüller, Martina, 2014. "Parental Response to Early Human Capital Shocks: Evidence from the Chernobyl Accident," IZA Discussion Papers 7968, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp7968
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    More about this item

    Keywords

    fetal origins; parental response; Chernobyl; radiation; health; culling; human capital; fertility; labor supply;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I20 - Health, Education, and Welfare - - Education - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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