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Sweet child of mine: Income, health and inequality

Nicolas Berman, Lorenzo Rotunno () and Roberta Ziparo ()

No 14444, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: How to allocate limited resources among children is a crucial household decision, especially in developing countries where it might have strong implications for children and family survival. We study how variations in parental income in the early life of their children affect subsequent child health and parental investments across siblings, using micro data from multiple waves of the Demographic and Health Survey (DHS) spanning 54 developing countries. Variations in the world prices of locally produced crops are used as measures of local income. We find that children born in periods of higher income durably enjoy better health and receive better human capital (health and education) investments than their siblings. Children whose older siblings were born during favourable income periods receive less investment and exhibit worse health in absolute terms. We interpret these within-household reallocations in light of economic and evolutionary theories that highlight the importance of efficiency considerations in competitive environments. Finally, we study the implications of these for aggregate child health inequality, which is found to be higher in regions exposed to more volatile crop prices.

Keywords: health; Income; intra-household allocations; Parental investments (search for similar items in EconPapers)
JEL-codes: D13 I14 I15 J13 O12 (search for similar items in EconPapers)
Date: 2020-02
New Economics Papers: this item is included in nep-hea
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