Low birth weight and health expenditures from birth to late adolescence

Abstract

The aim of this paper is to analyze the impact of low birth weight (LBW) and very low birth weight (VLBW) on health care utilization in childhood and early adolescence. Using Austrian health insurance administrative panel data linked to the Austrian birth register, we estimate the effects of LBW and VLBW in comparison to normal birth weight (NBW) on the number of days spent in the hospital and on expenditures for medical assistance and medical drugs among children and young adults between birth and 21 years of age. To account for the time-invariant heterogeneity of mothers, we control for sibling fixed effects. We find that, in comparison to their NBW counterparts, LBW infants spend more days hospitalized and more is spent on medical drugs (particularly on anti-infectives) for them in their first year of life. Although the absolute differences in health service utilization between NBW and LBW groups diminish over time, LBW newborns still spend more days hospitalized, and their medical drug and medical assistance expenses are significantly higher in early childhood. During compulsory schooling, we observe a shift toward diseases of the nervous system and mental and behavioral disorders among children born with LBW. Some of these effects persist until early adulthood. We argue for further counseling efforts for expectant mothers on the determinants and risk factors of LBW. Moreover, pre-school screenings especially tailored to LBW infants with a particular focus on mental health and behavioral disorders can be easily integrated in the existing postnatal mother-child care program in Austria to mitigate the consequences of negative conditions during pregnancy.