Abstract
A growing literature indicates that effects of early-life health on adult economic outcomes could be substantial in developing countries, but the magnitude of this effect is debated. We document a robust gradient between the early-life mortality environment to which men in India were locally exposed in their district and year of birth and the wages that they earn as adults. A 1 percentage point reduction in infant mortality (or 10 point reduction in IMR) in an infant's district and year of birth is associated with an approximately 2 percent increase in his subsequent adult wages. Consistent with theories and evidence in the literature, we find that the level of schooling chosen for a child does not mediate this association. Because of its consequences for subsequent wages, early-life health could also have considerable fiscal externalities; if so, public health investments could come at very low net present cost.
Highlights
A growing literature documents that workers exposed to better early-life health and less disease in early life have higher human capital as adults
1 log of hourly wage, net of district fixed effects article expands this literature beyond malaria and links the early-life mortality environment directly to adult wages in a developing country; we apply our estimates to compute consequences for government revenue, in the context of a large developing economy where our estimates are of continuing relevance
We find that exposure to better early-life health is associated with earning higher adult wages
Summary
A growing literature documents that workers exposed to better early-life health and less disease in early life have higher human capital as adults. This literature has largely focused on developed countries, economists have hypothesized that an effect of early-life health and disease externalities could be importantly larger in developing countries, where disease insults are worse and more varied (Currie and Vogl, 2013; Spears, 2012b). If early-life health importantly limits human capital in developing countries, wages could be a mechanism through which health has important effects on developing
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