Macroeconomic Conditions and Children's Health

Abstract: The United States has been faced with changing economic conditions over the past several years. There is mixed evidence on the impact of these swings on the health of the adult population, and few have looked at the impact on children’s health. This study examines the relationship between economic indicators and child health outcomes including prevalence of overweight, obese, BMI percentiles, occurrence of illnesses and frequency of illnesses. It uses the child-merged files from the 1979 cohort of the National Longitudinal Survey of Youth (NLSY79) data bi-annually from 1986 to 2010 combined with state level unemployment rates obtained from the Bureau of Labor Statistics (BLS) and state level GDP growth rates from the Bureau of Economic Analysis (BEA). Analysis on the adult sample replicates the results from existing literature, while an application of a fixed-effect model suggests individual level changes in health outcomes measured with longitudinal panel data may help address some of the issues with the mixed results. This analysis is applied to the children of the NLSY in the form of linear models, longitudinal fixed effects models, and an instrumental variables model to identify the causal mechanisms in health outcomes. Overall, although no strong relationship is established between economic conditions and child health outcomes, this is the first study that attempts to decipher this relationship. It has also contributed to the implementation of longitudinal methodology in this area of research to better measure the cause and effect relationship between the economy and health outcomes, and also established causal mechanisms in the form of an identification strategy to determine how parental investments influence child health. These results of this dissertation have paved the way for further research by establishing a methodological framework to study macroeconomic fluctuation’s impact on the status of children’s health.