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Early Health Shocks, Intrahousehold Resource Allocation, and Child Outcomes

Listed author(s):
  • Yi, Junjian

    ()

    (National University of Singapore)

  • Heckman, James J.

    ()

    (University of Chicago)

  • Zhang, Junsen

    ()

    (Chinese University of Hong Kong)

  • Conti, Gabriella

    ()

    (University College London)

An open question in the literature is whether families compensate or reinforce the impact of child health shocks. Discussions usually focus on one dimension of child investment. This paper examines multiple dimensions using household survey data on Chinese child twins whose average age is 11. We find that, compared with a twin sibling who did not suffer from negative early health shocks at ages 0-3, the other twin sibling who did suffer negative health shocks received RMB 305 more in terms of health investments, but received RMB 182 less in terms of educational investments in the 12 months prior to the survey. In terms of financial transfers over all dimensions of investment, the family acts as a net equalizer in response to early health shocks for children. We estimate a human capital production function and establish that, for this sample, early health shocks negatively affect child human capital, including health, education, and socioemotional skills. Compensating investments in health as measured by BMI reduce the adverse effects of health shocks by 50%, but exacerbate the adverse impact of shocks on educational attainment by 30%.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 8711.

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Length: 44 pages
Date of creation: Dec 2014
Publication status: published in: Economic Journal, 2015, 124 (588), F347–F371
Handle: RePEc:iza:izadps:dp8711
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  1. Bound, John & Solon, Gary, 1999. "Double trouble: on the value of twins-based estimation of the return to schooling," Economics of Education Review, Elsevier, vol. 18(2), pages 169-182, April.
  2. Pitt, Mark M & Rosenzweig, Mark R & Hassan, Md Nazmul, 1990. "Productivity, Health, and Inequality in the Intrahousehold Distribution of Food in Low-Income Countries," American Economic Review, American Economic Association, vol. 80(5), pages 1139-1156, December.
  3. Stanislav Kolenikov & Gustavo Angeles, 2009. "Socioeconomic Status Measurement With Discrete Proxy Variables: Is Principal Component Analysis A Reliable Answer?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(1), pages 128-165, March.
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