Health economics

Drinking during pregnancy and children’s test scores

Sarah Lewis, Stephanie von Hinke Kessler Scholder, George L Wehby, Luisa Zuccolo, 8 March 2014

Excessive drinking during pregnancy is known to harm the foetus, but estimating the effects of moderate prenatal alcohol consumption is difficult, since mothers who choose to drink may differ systematically from those who do not. This column presents recent research showing that a genetic variant in a maternal alcohol-metabolising gene (ADH1B) is negatively related to prenatal alcohol exposure, and unrelated to any of the background characteristics associated with prenatal drinking. Using this genetic variant as an ‘instrumental variable’, the authors find strong negative effects of prenatal alcohol exposure on child educational achievement.

Long-term consequences of the 1970 Clean Air Act

Adam Isen, Maya Rossin-Slater, Reed Walker, 19 February 2014

There is growing evidence that adverse infant health can have lasting effects on human capital formation and economic outcomes in adulthood. Among others, the poor environmental conditions have been linked to increased infant mortality and poor health. This column looks at the long-run effects of early-life pollution exposure. Using the Clean Air Act enacted in 1970 as a policy experiment, the study finds an association between reduced pollution and labour-market outcomes 30 years later. Reduced-pollution increases labour-force participation rate for affected individuals, which translates into a 1% increase in annual earning for an average individual in a cohort.

Sleeping together: Network effects and sleep duration

Xiaodong Liu, Eleonora Patacchini, Edoardo Rainone, 28 January 2014

Sleep is a key determinant of educational attainment among young adults, and carries with it longstanding health implications. This column provides evidence of network effects in adolescent sleeping decisions using a novel econometric approach. Young adults respond to the sleeping behaviour of their peer group, holding constant other observables. This compounding effect suggests a group approach to solving behavioural problems associated with sleep deprivation.

Medicaid and child mortality: New evidence

Andrew Goodman-Bacon, 15 January 2014

The effects of Medicaid on health are still unclear even though the programme is 50 years old. This column presents new evidence that quantifies the effect of the programme at the time of its implementation on children’s health. By the end of the 1970s, Medicaid had saved about 25,000 lives among nonwhite children, reducing their mortality rates by 8%, and narrowing the racial mortality gap. The tremendous benefits of Medicaid on lives of children from disadvantages groups should be taken into account in the policy debates about curtailing the programme.

Easy access to cannabis is tempting

Jan van Ours, Ali Palali, 12 October 2013

The decriminalisation of cannabis is a policy that divides policymakers sharply. This column uses evidence from the Netherlands to show a positive connection between early cannabis use and easy access to cannabis through coffeeshops. The policy implications, however, require further research. Closing coffeeshops could result in some potential users searching in the black market where hard drugs are available as well.

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