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The causal effect of an income shock on children’s human capital


Borra, Cristina; Costa-Ramon, Ana; González, Libertad; Sevilla-Sanz, Almudena (2021). The causal effect of an income shock on children’s human capital. Barcelona GSE Working Paper Series 1272, Barcelona Graduate School of Economics.

Abstract

We investigate the causal impact of a generous unconditional cash transfer at birth on children's later health outcomes and academic performance. Using rich administrative data, we take advantage of the unexpected introduction of a “baby bonus” in Spain in 2007, and implement a difference-in-discontinuity approach comparing children born in the surrounding months in different years. We find that the subsidy did not have a significant effect on health outcomes during childhood, nor on test scores in primary school. In line with this result, we show that the benefit did not affect the main potential mechanisms that could in turn have affected children’s health and academic performance. Our results contribute to understanding which interventions are effective at improving children's health and human capital formation.

Abstract

We investigate the causal impact of a generous unconditional cash transfer at birth on children's later health outcomes and academic performance. Using rich administrative data, we take advantage of the unexpected introduction of a “baby bonus” in Spain in 2007, and implement a difference-in-discontinuity approach comparing children born in the surrounding months in different years. We find that the subsidy did not have a significant effect on health outcomes during childhood, nor on test scores in primary school. In line with this result, we show that the benefit did not affect the main potential mechanisms that could in turn have affected children’s health and academic performance. Our results contribute to understanding which interventions are effective at improving children's health and human capital formation.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:I12, J13, H31, H24
Uncontrolled Keywords:Children, health, education, income shock, child benefit, Spain
Language:English
Date:July 2021
Deposited On:30 Aug 2021 15:29
Last Modified:30 Aug 2021 15:29
Series Name:Barcelona GSE Working Paper Series
Number of Pages:73
OA Status:Closed
Official URL:https://www.barcelonagse.eu/research/working-papers/causal-effect-income-shock-children%E2%80%99s-human-capital

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