Economic conditions and the health of babies. You won’t believe what the literature says!

from The Academic Health Economists’ Blo… at on June 30, 2016 at 12:31AM


How do economic conditions affect a person’s health? We can think of three major mechanisms that researchers examine. Firstly, the absolute effect of wealth or income that affects your access to health-influencing goods and services such as healthcare, good housing, high quality food, and exercise. Secondly, the relative effect of your social position through psychosocial mechanisms as widely popularised by Michael Marmot. And thirdly, the fetal origins hypothesis. Initially brought to popular attention by David J. Barker in 1986, the fetal origins hypothesis posits that the nine months in utero influence health over the course of a life through effects on the development of ones body and its organs. This latter mechanism provides a strong reason, beyond improving maternal health, for enacting policies that assist expectant mothers.

There is a growing research interest in identifying how economic conditions and maternal well-being affect the health of the baby. This can be used to inform policies to improve infant health and could take the form of improved maternity leave or social assistance in the form of cash transfers or other goods and services.

At an aggregate level a shift in economic conditions such as a change in the unemployment rate could affect infant health in different ways. Through an income effect mothers may buy more or less goods that affect the health of the baby. For example, some mothers may reduce smoking in the face of a reduction in household income. A substitution effect may lead to mothers to change the amount of time spent on work and more time on leisure or doing more or less health promoting activities. Finally, households may choose to delay or bring forward their fertility decisions. Thus the ultimate effect of economic conditions on the health of the birth cohort remains theoretically ambiguous.

Dehejia and Llera-Muney looked at the relationship between the unemployment rate and the proportion of babies born at low birth weights, a marker of poor infant health, in US states. They found that increases in the unemployment rate reduced the low birth weigh birth rate, which on further investigation appeared to be attributable both to a change in the women who choose to have a baby (they are of higher socioeconomic status) and an improvement in health behaviours. While interesting, however, this does not reveal much to us about what is going on at the level of the individual mother. Lindo showed that this effect is dependent on the level of aggregation of the data; at a more disaggregated level the effect diminishes. Indeed, unemployment is not a policy choice for improving infant health.

A paper featured recently on the journal round-up perhaps provides more useful information for the policy-making context. It showed that mothers participating in a social assistance programme in Uruguay that provided cash transfers to mothers experienced a lower rate of low birth weight births. These mothers showed increased weight gain, reduction in labour supply, and a reduction in smoking, all potentially contributing to infant health. A further paper by Lindo shows a negative impact of husband’s job losses during pregnancy on infant health at birth.

The evidence appears perhaps contradictory at the individual and aggregate levels: a classic case of Simpson’s paradox. This paradox describes the situation where a trend observed at the individual level disappears or even reverses when the data are aggregated. For an individual mother, providing her with extra income, improves the likely health of her baby; but across society as average incomes move, different mothers are making decisions to have children – fewer women of lower incomes are giving birth in times of recession. The appropriate evidence would therefore be that of the individual level.

Better maternity leave and greater social assistance for mothers would seem to be supported by the evidence as not only improving maternal health but also the long term health of her child.