Environment and Human Capital: The Effects of Early-Life Exposure to Pollutants in the Philippines (Job Market Paper – Please Contact For Most Current Version)
Economic activities cause changes in the environment that can damage health and human capital development. This paper examines fetal and early-life exposures to multiple pollutants and the effects on health and human capital development throughout life. The context of the study is Metropolitan Cebu, Philippines where a longitudinal survey is combined with unique databases characterizing temporal and spatial variation of pollutants in both the macro and micro-environments of individuals. The impacts of various pollutant types emitted from a variety of economic activities are examined utilizing instrumental variables to correct multiple potential biases. Findings indicate that height, a proxy of overall health, is negatively affected by increased exposure to carbon monoxide and nitrogen oxides, however the effects do not persist into adulthood. However, in addition health, increased early-life exposure to carbon monoxide, nitrogen oxide and aromatic hydrocarbons damages human capital development, and subsequently affects labor sector participation and hourly earnings.
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.
Estimating the Strength, Consistency, and Nature of the Relationship between Children’s Height-for-Age and Early Development: A Multi-Country Analysis with Dana C. McCoy, Günther Fink, Wafaie Fawzi and others
The first five years of life are critical for children’s development of foundational cognitive, motor, and socioemotional skills, yet estimates suggest that 200 million children under the age of five are failing to meet their developmental potential globally due to constraints of poverty, disease, and insufficient care. The absence of high-quality data has forced previous research to rely on physical growth as a representation of various dimensions of human capital despite little empirical support. The present study provides evidence on the strength, consistency, and nature of the relationship between physical growth and early child development in a sample of more than 45,000 three to five year-old children living in 16 developing countries. Testing the degree to which height-for-age proxies human capital at both the country and individual level, the results support the use of growth as a proxy for overall child development while also suggesting that particular dimensions such as socio-emotional and behavioral skills are inadequately described by physical growth.
The Returns to Education in Low-Income Settings with Günther Fink, 2014
Education plays a central role as a major investment tool yielding returns in the labor market. Previous studies have utilized large datasets from numerous regions across the globe and various methodologies to identify what an additional year of schooling means for earnings. However, the majority of evidence comes from higher income, developed countries where both the education received and the labor markets yielding returns differ from low to middle income countries where educational investment is a critical growth strategy. Temporal fluctuations in the labor market, institutional instability and various macroeconomic and political forces alter the returns to education. The study employs over 50 country-year datasets from low to middle-income countries to assess the regional and temporal trends in the returns to education.
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.
The Links Between Height, Human Capital and Schooling with Günther Fink, 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 which is only partially captured by the proxy of height. The results demonstrate the need to generate and utilize improved measures of human capital.