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Newborn health and the business cycle: Is it good to be born in bad times?

We study the effect of the business cycle on the health of newborn babies using 30 years of birth certificate data for Spain. Exploiting regional variation over time, we find that babies are born healthier when the local unemployment rate is high. Although fertility is lower during recessions, the effect on health is not the result of selection (healthier mothers being more likely to conceive when unemployment is high). We match multiple births to the same parents and find that the main result survives the inclusion of parents fixed-effects. We then explore a range of maternal behaviors as potential channels. Fertility-age women do not appear to engage in significantly healthier behaviors during recessions (in terms of exercise, nutrition, smoking and drinking). However, they are more likely to be out of work. Maternal employment during pregnancy is in turn negatively correlated with babies' health. We conclude that maternal employment is a plausible mediating channel.

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Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1374.

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Date of creation: Jun 2013
Date of revision: Mar 2014
Handle: RePEc:upf:upfgen:1374
Contact details of provider: Web page: http://www.econ.upf.edu/

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