What Roles Do Contemporaneous and Cumulative Incomes Play in the Income-Child Health Gradient for Young Children? Evidence From an Australian Panel

Abstract

The literature to date shows that children from poorer households tend to have worse health than their peers, and the gap between them grows with age. We investigate whether and how health shocks (as measured by the onset of chronic conditions) contribute to the income-child health gradient and whether the contemporaneous or cumulative effects of income play important mitigating roles. We exploit a rich panel dataset with three panel waves called the Longitudinal Study of Australian children. Given the availability of three waves of data, we are able to apply a range of econometric techniques (e.g. fixed and random effects) to control for unobserved heterogeneity. The paper makes several contributions to the extant literature. First, it shows that an apparent income gradient becomes relatively attenuated in our dataset when the cumulative and contemporaneous effects of household income are distinguished econometrically. Second, it demonstrates that the income-child health gradient becomes statistically insignificant when controlling for parental health and health-related behaviours or unobserved heterogeneity.

The Impact of Maternal Mental Health Shocks on Child Health: Estimates from Fixed-Effects Instrumental Variables Models for Two Cohorts of Australian Children

“…This paper examines the impact of maternal mental health on child health, relating to a very large body of literature on intergenerational transmissions in various aspects such as income or education (Solon, 1999;Black and Devereux, 2011). It also relates to a rich body of literature on the impact of parental income on child health (Case et al, 2002;Apouey and Geoffard, 2013;Fletcher and Wolfe, 2014;Khanam et al, 2014;Kuehnle, 2014), as well as emerging literature on the effects of parental health on child education (Bratti and Mendola, 2014;Alam, 2015;Le and Nguyen, 2015). 1 However, this paper more closely connects to an emerging body of research focusing on the relationship between parental health and child health.…”

The impact of household wealth on child survival in Ghana

“…Most of these studies found a positive relationship between socioeconomic effect and child health [10, 11, 18, 29, 30]. The most common variable used as a proxy for socioeconomic status of the household in recent past has been maternal educational status [2, 9, 16, 17].…”

Estimation in the Fixed-Effects Ordered Logit Model

“…In this section, I investigate the relationship between reported (subjective) children's health status and total household income using the conditional likelihood estimator that uses all (J − 1) T transformations. The analysis in this section follows that in Murasko (2008) and Khanam et al (2014). 21 In an influential paper, Case, Lubotsky, and Paxson (2002) use pooled cross-section data from the United States to document that reported children's health is positively related to household income.…”

“…However, they find that magnitude of the relationship is much smaller than that reported in Case et al (2002), and they do not find evidence that the strength of the relationship increases with the age of the child. Khanam et al (2014) use Australian data. This study appears to be the first that controls for time-invariant unobserved heterogeneity in this literature.…”