Early life health programmes can raise educational attainment and increase earnings but realization of the full potential of these programmes depends upon institutional capacity and market conditions.
The idea that policies targeted at influencing development early in life have high returns has gained currency, but the available causal evidence is relatively scarce. Existing studies either track small select samples over time or use cohort data to model a contemporary adult outcome as a function of an environmental exposure in early childhood.
MiSOC Co-I Sonia Bhalotra, with co-authors Martin Karlsson, Therese Nilsson and Nina Schwarz has investigated the dynamic lifecourse impacts of a universal early childhood (postnatal) health intervention trialled in Sweden in the early 1930s. When introduced this was a pillar of the emerging welfare state, and similar universal mother-baby programmes were rolled out subsequently across Europe. The programme resembled today’s Nurse Family Partnership in the UK, and similar programmes are currently being introduced in many developing countries. They essentially provide clinical advice and home visiting with a view to improving sanitation, breastfeeding, nutrition and early detection of problems.
If we evaluated an intervention on newborns today, we would need to wait at least 30 years to study its consequences for their labour market outcomes. The advantage of analysing a historical intervention is that the authors are able to track individuals through their lifecourse. They digitized birth certificates from parish records, and school records from regional archives and linked these to contemporary administrative data to create individual longitudinal data that run from birth through to death for a representative sample of 25,000 individuals.
In a paper written under the MISOC programme 2014- 2019, Infant health and longevity: Evidence from a historical intervention in Sweden. Journal of the European Economic Association, October 2017, the authors show that this simple low-cost intervention met its target insofar as it led to better infant health reflected in lower infant mortality. They also show that it exceeded its target, leading to higher life expectancy, resulting from a lower risk of death from cancer, cardiovascular disease and infection after the age of 50.
In a recent paper, Infant health, cognitive performance and earnings: Evidence from inception of the welfare state in Sweden, forthcoming, Review of Economics and Statistics, they show that the infant health programme led to higher cognitive attainment in primary school. This is in line with biomedical evidence that nutrition (net of infection) in the first year of life can influence brain development. Boys and girls benefited. Boys did uniformly better. Among girls, the top of the test score distribution shifted outwards. This left its trace. Entry to secondary school was rationed and competitive (there weren’t enough schools at the time). As the intervention led to girls becoming more competitive, the intervention led to an increase in secondary schooling among girls, but not boys.
Tracking the intervention cohorts further over time, they find that girls exposed to the health intervention grew up to be more likely to work, and they earned more but boys did not (everything is relative to a statistically valid control group of individuals who were not exposed to the intervention). Digging deeper they establish that in tandem with these cohorts emerging on the labour market, the welfare state was growing rapidly and this created jobs for women more quickly than for men—as nurses, teachers, midwives. So, both their higher place in the skills distribution, and the better job opportunities led to women benefiting more from the infant health programme than men.
The results of this study illustrate (a) the substantial potential economic gains to investing in early childhood health, and (b) that access to higher education and a growing demand for skill are important to realizing this potential.