Booms, busts, and babies' health

Rajeev Dehejia and Adriana Lleras-Muney
Quarterly Journal of Economics, Volume 119, Number 3 (August 2004), pp. 1019-1130

In this paper we study the relationship between the unemployment rate at the time of a baby's conception and health outcomes at birth, and we explore whether this relationship is due to the effect of the unemployment rate on fertility decisions or on the health-related behavior of pregnant women. Economic models of fertility suggest that women who choose to have children in recessions may differ from women who choose to postpone fertility. To the extent that these parental characteristics are related to children's health, differential fertility may result in differences in the health of children over the business cycle. At the same time, evidence suggests that individuals' health may improve during recessions, because the overall effect of recessions is to increase health-related activities (and to decrease risky behaviors). Therefore, changes in parental behavior over the business cycle could also affect the health of infants, even in the absence of compositional change.

Wagner Faculty