David Barker, Southampton General Hospital
The Developmental Origins of Longevity
Irma T. Elo, University of Pennsylvania; Pekka Martikainen, University of Helsinki; and Mikko Myrskylä, Max Planck Institute for Demographic Research
Early Life Family and Socioeconomic Conditions and Cause-Specific Mortality in Finland
Elo, Martikainen, and Myrskylä study the relationship between early life socioeconomic status (SES), household structure, and adult all-cause and cause-specific mortality in Finland among cohorts born in 1936-1950. They base their analyses on a 10 percent sample of households drawn from the 1950 Finnish Census of Population, with the follow-up of household members in subsequent censuses and death records beginning from the end of 1970 through the end of 2007. The Finnish data constitute a unique register-based dataset that does not rely on individual recall of early life social conditions, parental educational attainment, family type, and other life course trajectories. The researchers find significant associations between early life social and family conditions on all cause mortality, as well as on mortality from cardiovascular diseases, lung cancer and alcohol related diseases, accidents and violence, with the protective effects of higher childhood SES varying between 10 and 30 percent. These associations are mostly mediated through adult educational attainment and other socio-demographic characteristics, suggesting that the indirect effects of childhood socioeconomic and family conditions are more important than their direct effects. These results imply that long-term adverse health consequences of disadvantaged early life social circumstances may be mitigated by investments in educational and employment opportunities in early adulthood.
Flavio Cunha, University of Pennsylvania and NBER; James Heckman, University of Chicago and NBER; and Susanne Schennach, University of Chicago
Estimating the Technology of Cognitive and Noncognitive Skill Formation (NBER Working Paper No. 15664)
Cunha, Heckman, and Schennach formulate and estimate multistage production functions for childrens' cognitive and non-cognitive skills. Parental environments and investments at different stages of childhood determine skills. These researchers estimate the elasticity of substitution between investments in one period and stocks of skills in that period in order to assess the benefits of early investment in children as compared to later remediation. They establish nonparametric identification of a general class of production technologies based on nonlinear factor models with endogenous inputs. A by-product of this approach is a framework for evaluating childhood and schooling interventions that does not rely on arbitrarily scaled test scores as outputs and recognizes the differential effects of the same bundle of skills in different tasks. Using the estimated technology, they determine optimal targeting of interventions to children with different parental and personal birth endowments. Substitutability decreases in later stages of the life cycle in the production of cognitive skills. It increases slightly in later stages of the life cycle in the production of non-cognitive skills. This finding has important implications for the design of policies that target the disadvantaged. For some configurations of disadvantage and for some outcomes, the return to investments in the later stages of childhood may exceed that to investments in the early stage.
George Loewenstein and Duane Seppi, Carnegie Mellon University; Nachum Sicherman, Columbia University; and Stephen Utkus, Vanguard
The Ostrich Effect: Selective Attention to Financial News by Investors
Current information is an input into rational decisionmaking, but confronting good or bad news also can entail positive or negative emotional consequences, which can affect the ex ante decision of whether or not to acquire information. Using an extensive sample of account-level Internet activity by investors at a large asset management company, Loewenstein, Seppi, Sicherman,and Utkus examine daily account look-up behavior over a two-year period as a function of prior aggregate stock market moves and investor characteristics. They classify individuals as "ostriches" or "anti-ostriches" based on whether they are more likely to log in to check their accounts when the aggregate stock market is up (and investor equity positions can be expected to have appreciated) or down. This classification is highly reliable in the sense that those classified as ostriches in one year are also likely to be classified as ostriches in the other year, and in that people classified as ostriches based on daily market changes and look-ups are also likely to be classified as ostriches based on both weekly and monthly changes. The researchers also find that ostriches are far more numerous than anti-ostriches, but that the reverse is true for those with zero equity (for whom an increase in the value of stocks is bad news in a relative or opportunity cost sense). They also study ostrich behavior relative to the VIX volatility index and investigate other demographic characteristics of ostriches.
Paola Giuliano, University of California, Los Angeles and NBER, and Antonio Spilimbergo, International Monetary Fund
Growing Up in a Recession: Beliefs and the Macroeconomy(NBER Working Paper No. 15321)
Do generations growing up during recessions have different socioeconomic beliefs than generations growing up in good times? Giuliano and Spilimbergo study the relationship between recessions and beliefs by matching macroeconomic shocks during early adulthood with self-reported answers from the General Social Survey. Using time and regional variations in macroeconomic conditions to identify the effect of recessions on beliefs, they show that individuals growing up during recessions tend to believe that success in life depends more on luck than on effort, to support more government redistribution, but to be less confident in public institutions. Moreover, recessions have a long-lasting effect on individuals' beliefs.
Richard H. Steckel, Ohio State University and NBER
Bones and the Evolution of Human Health over the Millennia
Over the past 10 millennia, human health was transformed enormously by the transition from foraging to farming; the rise of cities and complex forms of social and political organization; colonization; and industrialization. The diversity of experience surrounding this vast sweep of time and space provides an excellent laboratory for examining the evolution of the human condition, using skeletal remains from archaeological sites as the basic data source. Steckel discusses the outlines of a research project that will gather skeletal evidence from 65,000 individuals, along with contextual information about the physical and socioeconomic localities where they lived, to investigate early childhood physiological stress and adult survival; precursors of violence and trauma; human adaptation to environmental change; the onset of degenerative conditions (osteoarthritis and dental disease); the ecological context of infectious diseases (TB, leprosy and syphilis) and metabolic diseases (scurvy and rickets); and the relationship between socioeconomic inequality and health.
Kenneth Manton, Duke University
Edward Vytlacil, Yale University and NBER
Recent Advances in Econometrics
Lena Edlund, Columbia University, and Chulhee Lee, Seoul National University
Son Preference, Sex Selection, and Economic Development: Theory and Evidence from South Korea
Motivated by high and rising sex ratios in such countries as India and China, Edlund and Lee formulate a theoretical framework for analyzing the impact of economic development on parental sex choice when sons are culturally prized and children provide old age support. Two key assumptions drive their model. First, the cultural value of a child varies not only with its gender but also with its marital status: a married son is preferred to a married daughter, but the latter is preferred to an unmarried son. Second, Edlund and Lee assume that faced with a shortage of brides, poor parents will have a harder time marrying off their sons than rich parents will. The model here predicts male sex ratios at low levels of development, where the surplus sons are chosen by the poorest, who forego grandchildren for old age support. With economic development, incomes and the price of brides rise. Sex ratios fall, and the relationship between parental income and offspring maleness turns positive. The researchers also present corroborative evidence from South Korea, a now developed country which, like India and China, has a strong patriarchal culture and a recent past of poverty.
Claudia Olivetti and M. Daniele Paserman, Boston University and NBER
In the Name of the Father: Marriage and Intergenerational Mobility in the United States, 1850-1930
Olivetti and Paserman construct a continuous and consistent measure of intergenerational mobility in the United States between 1850 and 1930 by linking individuals with the same first name across pairs of decennial Censuses. One of the advantages of this methodology is that it allows them to calculate intergenerational correlations, not only between fathers and sons but also between fathers-in-law and sons-in-law, something that is typically not possible with historical data. Thus, the paper sheds light on the role of marriage in the intergenerational transmission of economic status from a historical perspective. The researchers find that the father-son correlation in economic status grows throughout the period, but is consistently lower than the correlation between fathers-in-law and sons-in-law. The gap declines over time, and seems to have closed by the end of the period. They present a simple model of investment in human capital, marital sorting, and intergenerational mobility that can rationalize the findings.
Hoyt Bleakley, University of Chicago and NBER, and Joseph P. Ferrie, Northwestern University and NBER
Shocking Behavior: Land Lotteries in 1832 Georgia and 1901 Oklahoma and Later Life Outcomes
The Georgia Land Lottery of 1832 and Oklahoma Land Lottery of 1901 provide opportunities to assess the impact of large financial windfalls on a variety of outcomes later in life for individual lottery winners and their families. The Georgia lottery was designed to draw settlers to what became the ten counties in northwest Georgia carved out of the former Cherokee Nation. For this lottery, Bleakley and Ferrie compare winners to individuals who were eligible to participate but did not win. The Oklahoma lottery settled the southwestern part of the state. For this lottery, the researchers compare those who won parcels earlier in the lottery (who had the opportunity to select better plots) to those who won their parcels later. In both Georgia and Oklahoma, lottery winners' post-lottery location decisions were different from those of non-winners, as were some demographic outcomes (family size, marital status). Surprisingly, the Georgia lottery winners were no wealthier by 1850 than individuals who did not win plots in the lottery.