FRIDAY | November 3rd, 2.00 PM | ROOM B002, FLOOR 0
Does income change the development path of a low birth weight child?
We study the long-term effect of an exogenous injection of income resources in early infancy to investigate whether income can mitigate the detrimental consequences of a low birth weight (a measure of initial child endowment). We address the double endogeneity of birth weight and income by using twin difference estimation on the one hand and by exploiting a natural resource boom on the other. Namely, we consider the 70s Norwegian Oil Shock, which resulted in a semi-permanent income shocks. We exploit geographical variation in local labour markets exposure to this boom for cohorts of same-sex twins born in the first decade of oil extraction in Norway. Using Norwegian Registry data, linked to the Medical Birth Registry, we estimate the interaction effect of income shock and starting skills in producing skills at later ages. Results suggest that that the oil shock had an attenuation effect on the detrimental consequences of low birth weight.
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Francesca Zantomio is Professor of Public Economics at the Department of Economics, Ca' Foscari University of Venice. Her research focuses on micro-econometrics applied to public economics and in particular to the study of health, disability and welfare programmes, and the redistributive impact of government intervention.