NATIONAL BUREAU OF ECONOMIC RESEARCH

Cohort Studies Meeting

March 6, 2009
Dora Costa, Organizer

James Feyrer, Dartmouth College and NBER; Dimitra Politi, Brown University; and David N. Weil, Brown University and NBER
The Economic Effects of Micronutrient Deficiency: Evidence from Salt Iodization in the United States.

Iodine deficiency is the leading cause of preventable mental retardation in the world today. Iodine deficiency was common in the developed world until the introduction of iodized salt in the 1920s. The incidence of iodine deficiency is connected to low iodine levels in the soil and water. Feyrer, Politi, and Weil examine the impact of salt iodization in the United States United States by taking advantage of this natural geographic variation. Areas with high pre-treatment levels of iodine deficiency provide a treatment group that they can compare to a control group of low iodine deficiency areas. In the United States, salt was iodized over a very short period of time around 1924. We use previously unused data collected during WWI and WWII to compare outcomes of cohorts born before and after iodization, in localities that were naturally poor and rich in iodine. We find evidence of the beneficial effects of iodization on the cognitive abilities of the cohorts exposed to it.


Karen Norberg, Washington University and NBER; Richard Grucza, Washington University, St. Louis; and Laura Bierut, Washington University, St. Louis
Adolescence as a Sensitive Period: Long-term Effects of Minimum Purchase Age Laws on Alcohol and Drug Use Disorders

Many studies have found that early drinking initiation predicts higher risk of later alcohol and substance use problems, but it is not known whether policies influencing the age of onset of regular drinking would affect later drinking and substance use patterns, or whether early drinking onset is simply a marker for existing vulnerability to alcohol and substance use disorders. Norberg, Grucza, and Bierut use a "natural experiment" study design to compare the prevalence of DSM-IV alcohol and substance use disorders among adult subjects exposed to different minimum legal purchase age laws (MLPAs) in the 1970s and 1980s. The sample includes 33,869 respondents born in the United States from 1948-1970, drawn from two nationally representative cross-sectional surveys: the 1991 National Longitudinal Alcohol Epidemiological Survey (NLAES) and the 2001 National Epidemiological Study of Alcohol and Related Conditions (NESARC). Analyses control for gender, race, parental alcohol problems, age at assessment, and state and year fixed effects; some analyses also condition on age at drinking initiation, educational attainment, age at first marriage and age at first birth. The authors find that individuals who were legally allowed to purchase alcohol before age 21 had more than 25 percent greater odds of a current alcohol-use disorder or substance-use disorder (that is,alcohol or illegal drug use problems), with no apparent decline in effects with age. Purchase-age effects were similar among males and females, blacks and others, persons who did or did not report having parents with alcohol problems, and respondents reporting onset of drinking before and after age 16. The authors conclude that exposure to a lower minimum legal purchase age is associated with significantly higher risk of a current alcohol or other substance use disorder in middle adulthood. These findings are consistent with the hypothesis that late adolescence may be a "sensitive period" for environmental influences on the formation of alcohol use patterns.


Grant Miller, Stanford University and NBER; Diana M. Pinto, Pontificia Universidad ; and Marcos Vera-Hernandez, University College London
Supply- vs. Demand-Side Rationing in Developing Country Health Insurance: Evidence from Colombia's 'Regimen Subsidiado'

In developing countries, medical costs associated with unexpected illness are an important source of economic risk confronting households. Health insurance expansions therefore are a public policy priority, but they also produce socially undesirable consumer incentives for wasteful medical care use. Miller, Pinto, and Vera-Hernandez study the first major developing country effort (Colombia's Regimen Subsidiado) to promote efficient consumption under health insurance without sacrificing risk protection. Using a regression discontinuity approach, they find that by improving supply-side incentives through high-powered health insurance contracting, Colombia has provided risk protection with minimal wasteful consumption - and it has also increased the use of services with positive externalities (with some small associated health gains).

Martha J. Bailey, University of Michigan and NBER; and Nzinga Broussard, Claremont McKenna College
The Impact of Federal Family Planning Grants under the War on Poverty

Over 40 years ago, the U.S. government embraced a policy of funding domestic family planning services. The effects of these programs have been controversial since their inception. Bailey and Broussard generate event-study estimates of the impact of federal family planning grants by relying on variation in the timing of awards. Their results provide new evidence that federal family planning grants had a large and statistically-significant impact on birth rates up to 15 years after the date of award. There is no evidence of significant reductions in maternal or neonatal mortality or the incidence of low birth weight.


Price V. Fishback, University of Arizona and NBER; and Melissa A. Thomasson, Miami University and NBER
The Effects of Experiencing the Great Depression as a Child on Socioeconomic and Health Outcomes

Fishback and Thomasson use twentieth century data to examine how macroeconomic conditions just before and after birth affect infants when they become adults. Their analysis focuses on the worst downturn ever experienced in the United States — the Great Depression -- although they do not restrict their analysis to the Depression period. Merging data reported by respondents in decadal U.S. Census microdata from 1970-80 with information on the path of state per capita income during the individual's childhood years in the state of birth, the authors find that individuals born in poorer states (and in states with lower rates of income growth after their birth) are more likely to be high school dropouts, earn lower incomes, and have greater rates of disability than individuals born in states with higher incomes, even after controlling for socioeconomic characteristics such as race and education, year of birth, state of birth, and state of current residence. These results suggest that fluctuations in state-wide economic activity during the infant and early childhood period may have long-term consequences for an individual's socioeconomic status and health outcomes.


John Brown, Clark University
Fertility Control with Imperfect Methods: Strategies of Family Building and the Choice of Technique during the German Fertility Transition, 1885-1915

An extensive body of literature, mostly drawn from the Princeton project on the European fertility transition, is based on the critical assertion that fertility control during the transition was parity-dependent. The indirect evidence for this proposition is flawed. Following up on an argument formulated by Santow (1995) and David and Sanderson (1986), Brown revisits the question of control during the transition by placing it within the framework of dynamic models of fertility under uncertainty. He examines the choice of technique and the strategy for family building during the period of the transition in Germany, 1885 to 1915. Available technologies varied in efficiency, cost, and disutility, posing significant tradeoffs for couples. After establishing the relative efficiency of most of the technologies available to couples, Brown examines the decision to use birth control and the choice of birth control strategy. His econometric analysis uses a detailed survey of fertility outcomes, birth control practices, and social and economic information that includes much of the period of the transition. His results suggest that the logic of birth control technologies and desired family size created a bifurcated distribution of strategy choices.


Daron Acemoglu, MIT and NBER; David Autor, MIT and NBER; and Amanda Pallais, MIT,
Assessing the Rising Return to Education and Ability: Evidence from Army Veterans

A large literature has focused on rising inequality both between and within groups since the late 1970s. The increasing inequality between educational groups is typically considered to reflect an increase in the return to skill. Yet, little is known about what this skill represents, whether it is an increasing return to formal schooling or to cognitive ability. Acemoglu, Autor, and Pallais exploit a new dataset on Army veterans to investigate the changes in the returns to education and (normally) unobserved ability over time. Their dataset, created by combining Social Security earnings data with Army records, contains education data, AFQT scores, and 20 years of Social Security earnings data for more than 1.5 million Army veterans born between 1942 and 1964. The researchers show that the observed return to education increased between 1978 and 2005, controlling for AFQT scores, and the return to AFQT scores increased, controlling for education. They then write down a stylized single-index model in which the mapping between skill markers (such as education and AFQT) is time-invariant, while the relationship between skill and log earnings shifts linearly over time. While they reject the most restrictive cardinal implications of this model, an ordinal version of it provides a surprisingly good fit. Additionally, their initial results suggest that different levels of educational attainment represent separate, imperfectly substitutable skills, whereas they cannot reject that the skills represented by different levels of cognitive ability are perfectly substitutable.

 

 
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