The Influence of Early-life Economic Shocks on Long-term Outcomes: Evidence from the U.S. Great Depression

by Lauren Schmitz, University of Wisconsin-Madison and Valentina Duque, University of Sydney

How does health and economic productivity around retirement age and up to old age vary with early-life economic conditions? While previous research has shown that prenatal events can have consequences on outcomes in adulthood, there is a dearth of empirical evidence examining whether initial environments can influence human capital at later stages of the lifecycle. Using geographic variation in economic conditions from the most severe and prolonged economic downturn in American history—the Great Depression—combined with restricted micro-data from the Health and Retirement Study, this proposal will study the effects of economic downturns at birth on labor market outcomes, cardiovascular health, and physical mobility at older ages. From a policy perspective, our results are informative for the design of retirement and healthcare systems and for assessing the cost of business cycles.

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