Early Health Shocks, Intrahousehold Resource Allocation, and Child Outcomes

Junjian Yi, James Heckman, Junsen Zhang and Gabriella Conti

No 8711, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: 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%.

Keywords: intrahousehold resource allocation; human capital formation; early health shocks (search for similar items in EconPapers)
JEL-codes: C23 D13 I12 J13 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2014-12
New Economics Papers: this item is included in nep-dem and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published - published in: Economic Journal, 2015, 124 (588), F347–F371

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Related works:
Working Paper: Early Health Shocks, Intrahousehold Resource Allocation, and Child Outcomes (2014)
Working Paper: Early Health Shocks, Intrahousehold Resource Allocation, and Child Outcomes (2014)
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