Intergenerational Transmission of Disadvantage: Negative Parental Selection, Economic Upheaval, and Smoking

Abstract

Recessions negatively impact the health of individuals experiencing hardship. In this paper, we investigate whether there are also long-term intergenerational health effects through their effects on health behavior of children born during difficult economic times. Based on a theoretical model of parental socialization against smoking, and using data from the German Socioeconomic Panel, we assess whether children born in the years immediately after the fall of the Berlin Wall in East Germany are more likely to smoke in adulthood. Using a difference-in-difference specification with West Germans as a control group, we find that men born during this time are 40% more likely to smoke in young adulthood than men born during the years before and afterwards. The fall of the Berlin Wall led to enormous social and economic upheaval and resulted in a stark drop in incomes and fertility in East Germany. Fertility dropped least among the lower educated and younger mothers. The resulting negative parental selection, as measured by parental education and childhood family environment, explains about one fifth of the higher incidence of smoking among children. Economic upheaval alone is unlikely to explain the remainder of the difference in smoking rates since we find no effect on smoking for those born to mothers who were already pregnant when the Berlin Wall came down, that is, those who grew up in the same environment as those born right afterwards. We conclude that it is likely that the disadvantage in childhood caused by the combination of negatively selected parents coupled with the economic upheaval reduced both the amount and quality of parental socialization against smoking, leading to the increased smoking rates that we observe.