Parental Response to Early Human Capital Shocks: Evidence from the Chernobyl Accident

52 Pages Posted: 22 Feb 2014

See all articles by Martin Halla

Martin Halla

Johannes Kepler University Linz - Department of Economics; IZA Institute of Labor Economics

Martina Zweimüller

Johannes Kepler University Linz - Department of Economics

Abstract

Little is known about the response behavior of parents whose children are exposed to an early-life shock. In this paper we interpret the prenatal exposure of the Austrian 1986 cohort to radioactive fallout from the Chernobyl accident as a negative human capital shock and examine their parents' response behavior. To identify causal effects we can rely on exogenous variation in the exposure to radioactive fallout (over time and) between communities due to geographic differences in precipitation at the time of the accident.We find robust empirical evidence of compensating investment behavior by parents in response to the shock. Families with low socioeconomic status reduced their family size, while families with higher socioeconomic status responded with reduced maternal labor supply. Compensating investment made by the latter group seems relatively more effective because we do not find any detrimental long-term effects for exposed children from higher socioeconomic backgrounds. In contrast, exposed children from low socioeconomic backgrounds have significantly worse labor market outcomes as young adults.

Keywords: fetal origins, parental response, Chernobyl, radiation, health, culling, human capital, fertility, labor supply

JEL Classification: I18, I20, Q48, Q53, J24

Suggested Citation

Halla, Martin and Zweimuller, Martina, Parental Response to Early Human Capital Shocks: Evidence from the Chernobyl Accident. IZA Discussion Paper No. 7968, Available at SSRN: https://ssrn.com/abstract=2399808 or http://dx.doi.org/10.2139/ssrn.2399808

Martin Halla (Contact Author)

Johannes Kepler University Linz - Department of Economics ( email )

Altenbergerstrasse 69
A-4040 Linz, 4040
Austria

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Martina Zweimuller

Johannes Kepler University Linz - Department of Economics ( email )

Altenbergerstrasse 69
A-4040 Linz, 4040
Austria

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