NBER Reporter: Summer 2001

Well-Being of Children

The NBER's Program on the Well-Being of Children, directed by Jonathan Gruber of MIT, met in Cambridge on April 5. The following papers were discussed:

Bruce Sacerdote, NBER and Dartmouth College, "The Nature and Nurture of Economic Outcomes" (NBER Working Paper No. 7949)

David N. Figlio, NBER and University of Florida, and Maurice E. Lucas, Alachua County School Board, "Do High Grading Standards Affect Students Performance?" (NBER Working Paper No. 7985)

Paul J. Gertler, NBER and University of California, Berkeley, and Simone Boyce, University of California, Berkeley, "An Experiment in Incentive-Based Welfare: The Impact of PROGRESA on Health in Mexico"

Raghabendra Chattopadhyay, India Institute of Management, and Esther Duflo, NBER and MIT, "Women's Leadership and Policy Decisions: Evidence From a Nationwide Randomized Experiment in India"

Joseph G. Altonji and Christopher R. Taber, NBER and Northwestern University, and Todd E. Elder, Northwestern University, "Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools" (NBER Working Paper No. 7831)

Anne Case and Christina Paxson, NBER and Princeton University, and Darren Lubotsky, Princeton Unversity, "Economic Status and Health in Childhood: The Origins of the Gradient"

Sacerdote uses data on adopted children to examine the treatment effects of family environment on childrens' educational and labor market outcomes. He uses four datasets containing information on adopted children, their adoptive parents, and their biological parents. In at least two of the four, the mechanism for assigning children to adoptive parents is fairly random and does not match children to adoptive parents based on health, race, or ability. Sacerdote finds that adoptive parents' education and income have a modest impact on child test scores but a large impact on college attendance, marital status, and earnings. In contrast with other work on IQ scores, he does not find that the influence of adoptive parents declines with child age.

Figlio and Lucas explore the effects of high grading standards on student test performance in elementary school. This paper provides the first empirical evidence on the effects of grading standards, measured at the teacher level. Using an exceptionally rich set of data including every third, fourth, and fifth grader in a large school district over four years, the authors match students' gains in test scores and their disciplinary problems to teacher-level grading standards. In models that control for student-level fixed effects, there is substantial evidence that higher grading standards benefit students. But these effects are not uniform: high-achieving students apparently benefit most from high standards when they are in a relatively low-achieving class; low-achieving students benefit most from high standards when they are in a relatively high-achieving class.

Gertler and Boyce investigate the impact on health outcomes of a unique anti-poverty program in Mexico: PROGRESA, which combines a traditional cash transfer program with financial incentives for families to invest in human capital of children (health, education, and nutrition). In order to receive the cash transfer, household members must participate in a series of preventive health and nutrition activities including prenatal care, nutrition monitoring and supplementation programs, preventive check ups, and health education programs. The authors find that the program significantly increased use of public health clinics for preventative care. The program also lowered the number of inpatient hospitalizations and visits to private providers, which suggests that PROGRESA lowered the incidence of severe illness. Also, there is significant improvement in the health of both children and adults. Specifically, treatment children have a 15 percent lower incidence of illness, are 1-3 percent taller, about 3.5 percent heavier, and have about a 28 percent lower incidence of anemia. Adults had far fewer days of difficulty with daily activities because of illness, the number of days in bed, and days incapacitated. Adults also reported a significant increase in the number of kilometers they were able to walk without getting tired.

Chattopadhyay and Duflo use the policy of political reservation for women adopted in India to study the impact of women's leadership on policy decisions. In 1998, one third of the positions of chief of the Village Councils of India were randomly selected to be reserved for women: in reserved village councils, only women could be candidates for the position of head. The Village Councils are responsible for the provision of many local public goods in rural areas. Using a dataset on 165 Village Councils, the authors compare the type of public goods provided in reserved versus unreserved Village Councils. They show that women invest more in infrastructure that is directly relevant for rural women (water, fuel, and roads), while men invest more in education. The participation of women in the policymaking process is higher in reserved Village Councils, but there is no evidence of any difference between the level of efficiency and corruption of women and men.

Altonji, Elder, and Taber measure the effect of attendance in a Catholic high school on educational attainment and test scores. They develop certain new estimation methods and a way to assess selectivity bias. They use their methods to estimate the effect of attending a Catholic high school on a variety of outcomes. Their main conclusion is that Catholic high schools substantially increase the probability of graduating from high school and, more tentatively, college attendance. They do not find must evidence for an effect on test scores.

Case, Lubotsky, and Paxson assess the mechanisms that run from income to health by focusing on children. Generally children in the United States do not contribute to the family income, and the correlation between poor health in childhood and low family income therefore cannot be explained by lower earnings of children (although it should be noted that ill children could reduce parental labor supply). By focusing on children, the authors eliminate the channel that runs from health to resources. Using a variety of cross-sectional and panel datasets for the United States from the mid-1980s to 1997, the authors find that the gradient observed in adulthood is present for children from their first year to age 17. Moreover, the gradient of health with respect to income becomes steeper with age. Small but significant differences among 5-year-olds become more pronounced for 10-year-olds, and larger still for 15-year-olds. In addition, the response of health to chronic illnesses is one important mechanism through which income affects the health status of children. Not only are poor children significantly more likely to suffer from asthma (for example) but, among children with asthma, health status is more seriously compromised for poor children than for rich ones. The authors' panel data estimates are consistent with a model in which the effects of low long-run average income are cumulative over a child's life.

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