While much attention has been paid to how inherited traits such as skin tone or height influence economic success, a groundbreaking new study from the Journal of Political Economy argues that it is a malleable characteristic – in utero health – that most strongly indicates how well a child will fare in adulthood. This study has important implications for public policy, suggesting that programs targeting early-life health have higher returns for reducing racial disparities in socioeconomic outcomes than more traditional investments, including schooling.
"The key distinction for policy purposes is that whereas heredity is immutable, congenital characteristics are mediated by the prenatal environment. This strongly suggests that economic outcomes are malleable in a way not widely recognized and therefore subject to improvement," explains Douglas Almond (Columbia University).
Detecting delayed effects is inherently difficult, and Almond ingeniously utilizes census microdata from three decades – including not only birth year, but birth quarter – to analyze the adult economic outcomes of those exposed in utero to the 1918 influenza pandemic. Twenty-five million people in the United States contracted influenza during the 1918 pandemic and survived. The pandemic struck without warning and lasted only a few months, meaning that those born a few months apart had markedly different in utero conditions. Additionally, the severity of the pandemic varied widely and idiosyncratically across states with little in common economically, demographically, climatically, or geographically.
"The 1918 influenza pandemic provides an exceptional opportunity to evaluate effects of prenatal environment using U.S. census data," writes Almond. "Some of the highest infection rates were observed among women of childbearing age, one third of whom contracted influenza."
Almond found that the children of infected mothers were 15 percent less likely to graduate from high school, and sons of infected mothers earned approximately $2,500 less per year than those who did not have fetal influenza exposure. Additionally, those who were in utero at the height of the epidemic had 20 percent higher disability rates at the age of 61.
"This broad range of socioeconomic impacts is found among men, women, whites, and non-whites alike," writes Almond. "This finding, when combined with previous positive findings on the long-term health effects of the prenatal period, helps explain the gradient between adult health and economic outcomes. That fetal health may be at the fulcrum of this relationship suffers no shortage of policy implications." Specifically, the findings indicate that racial disparities in adult health and economic status could be reduced by targeting early-life health of black infants.
JPE has been presenting significant research and scholarship in economic theory and practice since its inception in 1892. Publishing analytical, interpretive, and empirical studies, the Journal presents work in traditional areas--monetary theory, fiscal policy, labor economics, development, micro- and macroeconomic theory, international trade and finance, industrial organization, and social economics. For more information, please visit: www.journals.uchicago.edu/JPE.
Douglas Almond. "Is the 1918 Influenza Pandemic Over? Long-term Effects of In Utero Influenza Exposure in the Post-1940 U.S. Population" Journal of Political Economy, 114:4.
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Journal of Political Economy