Research

Working Papers:

Environment and Human Capital: The Effects of Early-Life Exposure to Pollutants in the Philippines (Job Market Paper and Appendix)

Human capital, a determining factor in individual labor market and macroeconomic outcomes, is malleable to early-life investments and insults. This study examines the long-term human capital impacts of early-life exposure to criteria air pollutants in the developing economy context of Metropolitan Cebu, Philippines. A three-decade, longitudinal survey containing frequent measures of human capital is combined with macro- and micro-environmental databases characterizing pollution exposure. An instrumental variable strategy corrects the bias from unobserved heterogeneity and measurement error. Findings indicate that height and cognition – a correlate and measure of human capital – are negatively affected by increased early-life exposure to pollution. Impacts to labor market outcomes, including hours worked and earnings, vary by gender and labor sector. Carbon monoxide exposure is consistently detrimental to both height and cognition while the effects of ozone exposure grow over time and are highly detrimental to cognition and earnings. In present value terms, a hypothetical regulatory reduction in ozone levels by 10% would produce approximately $2,000 in lifetime income per person born each year.

Are Rural Markets Complete? Prices, Profits and Recursion with Daniel LaFave and Duncan Thomas

The agricultural household model under complete markets allows the simultaneous production and consumption decisions faced by farm households to be modeled recursively. To assess the validity of the recursive framework, a number of papers have tested if production may be treated independently from consumption, and find mixed results. This paper empirically assesses a previously unexamined restriction of complete markets on consumption choices rather than production. Recursion implies production and consumption are linked only through an income effect from the farm business. When this condition holds, the prices of farm inputs affect consumption demands solely through a farm-profit income effect. This implies a restriction on how farm input prices relate to consumption allocations that we test using new, detailed longitudinal data from Indonesia. The data includes transaction prices for farm inputs and consumption goods collected in local shops and markets over a six-year period that we use in estimating a flexible household demand system while accounting for time invariant household and farm heterogeneity. We find strong evidence to reject complete markets, providing complementary evidence to previous findings in the literature examining separation from only the production side. We further show that those households at the bottom of the socioeconomic status distribution face market incompleteness, while those at the top are able to operate as if markets are complete.

Decision-making by Households with V. Joseph Hotz and Duncan Thomas

This paper investigates the validity of the unitary and collective models in describing household behavior in Central Java, Indonesia. The conclusions of utility theory apply to individuals yet many empirical studies apply them to households. In developing countries, where it is common to find many adults living under the same roof or extended families living in close proximity, describing the behavior of households becomes more complex. The results support the use of the unitary model in describing single adult households while rejecting its use for multiple adult homes. Furthermore, there is little evidence that allocations made by households composed of couples with and without children are Pareto efficient, as assumed in the collective model.

Early childhood developmental delay in low- and middle-income countries: National, regional and global estimates with Dana C. McCoy, Günther Fink, Wafaie Fawzi and others

Early childhood development influences life course health and wellbeing. Existing estimates of unmet developmental potential in low- and middle-income countries (LMICs) are generally based on proxy measures such as stunting and poverty. Our aim was to estimate the number of children who are experiencing developmental delays in LMICs. We used data from the Early Childhood Development Module of the fourth round of the Multiple Indicator Cluster Survey (MICS4) programme, the Human Development Index (HDI), and the Nutrition Impact Model Study (NIMS) to analyze the relationship between country-level prevalence of early childhood developmental delay and stunting, education, income per capita, and life-expectancy in 17 MICS4 countries. A total of 125.7 million children (95% CI 119.1, 132.3) in LMIC contexts were estimated to experience developmental delay in 2010. The largest number of children with developmental delay came from the WHO Africa region, followed by South East Asia and the Western Pacific. The results indicate that targeted and context-specific interventions are needed in LMICs to reduce exposure to adversity in early childhood and to directly stimulate the early development of cognitive, motor, and social-emotional skills.

The Returns to Education in Low-Income Settings: Evidence from the Living Standards and Measurement Survey with Günther Fink, 2014

While a large literature has investigated the returns to education in high-income countries, evidence on labor market returns to schooling in less developed countries is scarce. We utilize 63 nationally representative household surveys conducted between 1985 and 2012 in order to estimate the returns to education in 27 developing countries. We find an average return of 7% for each year of schooling, with slightly lower returns in rural areas, and slightly higher returns for females than for males, and particularly low rates of returns in former Eastern European countries. Overall, we find no evidence that returns to education are particularly high in developing countries.

The Links Between Height, Early-Child Development and Schooling with Günther Fink and Dana McCoy, 2014

We examine the link between the physical and non-physical dimensions of human capital determining educational outcomes as related to early-childhood and resulting development in both low and high-income settings. Previous research has established that height, a physical dimension of human capital, reflects cognitive and other forms of human capital and is positively associated with increased years of schooling in developing countries. We first demonstrate that while this link exists in higher income countries the strength of the association is much smaller. Second, utilizing measures of early-childhood cognitive development we show a persistent relationship between cognition and schooling that is only partially captured by the proxy of height. The results demonstrate the need to generate and utilize improved measures of human capital.

Current Projects:

Obesity, Bisphenol A and Epigenetics: A Natural Experiment in Epigenetic Responses to Bisphenol A

Research proposes obesogens – xenobiotic chemicals that produce obesity – as key drivers of expanding obesity rates. A potential obesogen is the endocrine disruptor BPA. One of the highest volume chemicals produced worldwide and present in over 90% of individuals in the United States, relatively little is known about its effect on childhood obesity. Animal studies demonstrate that gestational BPA exposure alters the epigenome to increase the expression of genes related to obesity, alterations that are counteracted by methyl donor nutrients like folic acid. The 1998 US folic acid fortification of enriched grains was designed to reduce neural tube defects yet also created a natural experiment of temporal variation in human folic acid intake. This study utilizes the natural experiment of folic acid fortification to examine the links between gestational bisphenol A (BPA) exposure, folic acid intake, and childhood obesity. Additionally, the study examines how BPA and folic acid influence the body size of children predisposed to obesity, and elucidates the roles of BPA and folic acid in the disparity and economic burden of the global obesity epidemic.

Examining the Health Consequences of Simultaneous Exposures to Pollution and Elevated Stress

Animal studies have revealed developmental delays due to the simultaneous exposures of environmental toxins and elevated stress in utero. This paper examines the health impacts throughout life of simultaneous fetal exposures to elevated stress and environmental contamination in the developing world. To examine development this study employs a long-running health and nutrition survey containing a variety of physical and cognitive development indicators in Metropolitan Cebu, Philippines. Additionally, unique data characterizing the local sources of pollution and the transport of pollutants from the source to the individual is used to describe exposures to multiple environmental toxins with spatial and temporal variation generated by influences on the transport of the contaminant. Finally, records of local natural disasters, namely typhoons, produce variation in maternal stress levels.

The Acid Rain Program: Causal Health Effects of the Policy with Corwin Zigler and Francesca Dominici, 2014

The U.S. Acid Rain Program enacted in 1990 gave valuable tradable sulfur dioxide emissions permits-called “allowances”–to electric utilities with the goal of reducing annual SO2 emissions by 10 million tons below 1980 levels. Tradable allowances provide administrators the freedom to implement the lowest cost method to reduce emissions or to continue emitting through purchases of allowances. The optimization performed by the administrator produces temporal and spatial variation in emissions and exposures to surrounding residents plausibly unrelated to unobserved determinants of health.  We exploit this quasi-experimental variation to provide estimates of the public health impacts of the U.S. Acid Rain Program.

Factors for Child Development and Human Capital: Comparative National and Global Assessment with Wafaie Fawzi, David Canning, Majid Ezzati, Jack Schonkoff and others

Child survival has improved significantly over the past few decades, yet progress in reducing early life risk factors that affect the subsequent health, growth, and development of young children who do not die has been less impressive. An estimated 20 million low-birth-weight babies are born each year globally and recent work has shown that more than half of low-and-middle-income countries have less than a 50% chance of achieving the Millennium Development Goal 1 on reducing hunger and undernutrition.  Adversities and illnesses in early childhood affect children’s development and have potentially long term educational and economic effects. However, there is limited information about the educational and economic impacts of these risk factors at the national level, and no comparable global analysis that covers all countries. This project will investigate the impacts of early childhood adverse experiences for all developing countries. The results of this project are intended to influence policy and practice related to children throughout the world.

Returns to Schooling: A Systematic Review and Meta-Analysis with Günther Fink

The economic return to an additional year of schooling is one of the most widely studied topics in the field of economics.  A wide variety of methods, data, and contexts have been used to explore this question with often vastly different results.  The objective of this study is to systematically review the existing evidence from this large and rapidly growing literature aiming to identify the causal effect of schooling on labor market outcomes. The results demonstrate that the return to a year of education is not a single parameter, rather heterogeneity in regions, time periods, population and research methodologies yield patterns which place previous research in context and and identifies areas to be addressed by future research.